US Says It Will Spend $3 Billion on Electric Vehicle Battery Manufacturing

The White House reportedly wants half of all vehicles sold in the US to be electric by 2030.

US Says It Will Spend $3 Billion on Electric Vehicle Battery Manufacturing

Photo Credit: Reuters

The funding will help establish and retrofit battery factories for electric vehicles

Highlights
  • The US will spend over $3 billion (roughly Rs. 23,000 crore) in funding
  • The latest funding will help establish and retrofit battery factories
  • The US is seeking energy independence and to cut inflation pressures

The Biden administration will allocate more than $3 billion (roughly Rs. 23,000 crore) in infrastructure funding to finance electric vehicle (EV) battery manufacturing, US officials said on Monday.

The funds will be allocated by the Department of Energy from the $1 trillion (roughly Rs. 76,62,200 crore) infrastructure bill US President Joe Biden signed last year. Among the initiatives will be processing of minerals for use in large-capacity batteries and recycling those batteries, the agency said in a statement.

Biden wants half of vehicles sold in the US to be electric by 2030, a goal he hopes will boost unionized manufacturing jobs in key election battleground states, thwart Chinese competition in a fast-growing market, and reduce climate-changing carbon emissions.

The administration is also positioning the measures as a step to secure energy independence and cut long-term inflation pressures exacerbated by Russia's February 24 invasion of Ukraine.

"As we face this Putin price hike on oil and gas, it's also important to note that electric vehicles will be cheaper over the long-haul for American families," Mitch Landrieu, the White House infrastructure coordinator, told reporters in a briefing, referring to Russian President Vladimir Putin.

Ford Motor Co welcomed the announcement.

“This investment will strengthen our domestic battery supply chain, create jobs, and help US manufacturers compete on the global stage,” Steven Croley, Ford's general counsel, said in a statement. "We have a moment of opportunity to own this technology here in the US, and investments like the one announced today will help us get there.”

The latest funding will help establish and retrofit battery factories. The infrastructure law also allocated billions more for the government to purchase electric buses and install EV chargers. The administration has been collaborating with manufacturers, including Tesla Chief Executive Elon Musk, General Motors CEO Mary Barra and Ford CEO Jim Farley.

But the funds will not go toward developing new domestic mines to produce the lithium, nickel, cobalt and other high-demand minerals needed to make those batteries. Some of those projects face local opposition and are tied up in Biden administration environmental and legal reviews.

"These resources are about battery supply chain, which includes producing, recycling critical minerals without new extraction or mining," said Gina McCarthy, Biden's national climate adviser. "So that's why we're all pretty excited about this."

In March, Biden invoked the Cold War-era Defense Production Act to support the production and processing of those minerals. He requested funding to support that initiative last week as part of a $33 billion (roughly Rs. 2,52,800 crore) package on Ukraine-related initiatives.

© Thomson Reuters 2022


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