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President Joe Biden is Taking a Step to Counter China’s Dominance in The Field of Electric Batteries!
The focus of this week’s reports on supply chain inadequacies is on developing a domestic battery business with billions in government support.
President Biden had planned to spend this week discussing his climate agenda and efforts to reduce reliance on China, but Vladimir Putin got in the way.
Even as Biden was laying out penalties against Russia as retaliation for the invasion of Ukraine, his administration moved forward: on Thursday, it released a flurry of studies detailing supply-chain weaknesses exposed by the epidemic, as well as efforts to fix them.
The papers include everything from vaccine-making materials to semiconductors, but developing indigenous battery production is one of the primary priority areas. Joe Biden’s solution is government support – billions of dollars — to accelerate innovation along the EV supply chain, from lithium extraction to battery recycling. The funds will come from a bipartisan infrastructure measure that I discussed in October.
With rising battery material prices such as nickel, lithium, and cobalt contributing to his inflation worries this week, Joe Biden shifted his presidential powers farther up the supply chain. He held an event with California Governor Gavin Newsom on Tuesday to tout federal support for two companies: MP Materials, which processes rare earth elements used to make magnets for electric vehicles, and Berkshire Hathaway Energy, which is one of three companies testing methods for sustainable lithium extraction in the Salton Sea.
There’s a lot of potential for failure. As Joe Lowry, a lithium mining expert, pointed out to me, none of the businesses working in the Salton Sea have proved that their process, known as direct lithium extraction, can operate on a commercial scale. Other companies have tried and failed in the past, as my colleague David Baker has reported.
The Department of Energy will begin distributing $6 billion in subsidies for battery manufacture in a few months, with nearly half of that allocated for domestic materials and battery recycling. Executives from the battery industry are lined up, including Ryan Melsert, a former Tesla executive who is now the CEO of American Battery Technology, a Nevada firm that mines and recycles battery metals. Melsert, who assisted in the design of Tesla‘s gigafactory in Nevada, says he has found out a technique to process metals that is both cleaner and more efficient than what is done in China.
He’s already received a Department of Energy funding for a project he’s working on with GM, Ford, and Stellantis to show how his business can recycle old battery packs and transform them into cathode materials for new cells.
Melsert estimates that there will be enough old EVs on the road to supply his recycling operation in a few years. Meanwhile, he’s depending on consumer gadgets, waste from battery companies, and electric vehicles that have been recalled due to a battery fire danger.
We keep witnessing massive electric car recalls — hundreds of thousands of vehicles at a time. Right now, recalls, faults and production waste all play a big role.
Ryan Melsert’s remark.
Even still, it will be a long time before local industries can meet automakers’ need for battery materials, especially as the number of electric vehicles on the road grows. Another ex-Tesla employee working to close supply chain gaps in the United States, Chris Burns, thinks that keeping up with demand is the most difficult challenge. Burns is the CEO of Novonix, a company that is constructing a factory in Tennessee to produce synthetic graphite for batteries, which he claims would help them last longer.
Consumers, vehicle companies, and the administration all want it to be homegrown, but right now there aren’t enough participants. That’s one of the issues we’ll confront over the next ten years.
Chris Burns said of battery materials and processing businesses.
