US increases production to catch China in global battery race

As battery-powered electric vehicles become a mainstay on the nation’s highways — and a key piece of President Biden’s environmental policy — the U.S. is facing a formidable challenge in its efforts to compete in the global battery race.

“The problem is, we’re just pretty far behind here,” Ethan Elkind, director of the climate program at Berkeley Law’s Center for Law, Energy & the Environment, told The Hill.  

“We should have been planning for this a decade ago,” he added. “But I think we can get things moving, now that there’s bipartisan support for it.”

Some of that support was evident in November’s passage of the bipartisan infrastructure bill, which allocated $7.5 billion toward a national network of electric vehicle (EV) chargers — and followed the Biden administration’s August declaration that half of new cars sold in the U.S. would be zero-emission by 2030. 

Just last month, the U.S. Department of Energy announced that it would be allocating $3.16 billion in funding from the infrastructure bill to produce more batteries and associated components in America, while bolstering related supply chains.

To compete with China, the world’s leading player, the U.S. needs to determine precisely where its dollars will be most effective and then streamline the permit process for mining and manufacturing facilities.

Despite the fact that lithium-ion battery technology was invented in the U.S. in the 1970s, China has been able to control the supply chain thus far.

“The Chinese Communist Party for over 30 years has been thinking very strategically about, as we shift from a fossil fuel-based economy to a minerals, clean energy-based economy, how can they leapfrog ahead of the rest of the world, I think, and become sort of the global powerhouse in this new energy economy,” said Abigail Wulf, director of critical minerals strategy at the think tank Securing America’s Energy Future. 

Wulf called the announcement of the $3 billion for batteries under the bipartisan infrastructure law a “huge” step toward addressing the imbalance. 

“Is it going to solve all our problems? No,” she said. “But it’s the first time that our government has ever really gotten to this in any major way, which I think is really exciting.” 

George Crabtree, a senior scientist at the Department of Energy’s Argonne National Laboratory, noted the U.S. is also “way behind” Europe in battery production. He said that China’s dominance went beyond the mining of materials. 

“They traveled the world and made deals with the foreign suppliers. And they dominate a lot of the refining of the materials that they don’t mine themselves. So there’s really a two-level lock on the supply chain,” he said. 

Crabtree said, however, that as the global EV demand continues to grow over the next decade, China will no longer “be able to handle the entire market.” 

“So in a sense, there’s a challenge for every would-be supplier of EVs, where you’re going to get the batteries, and that applies to China as well,” Crabtree said. 

“They have a head start, but they haven’t solved the problem yet,” he added. 

As the U.S. likewise attempts to solve this problem, the Department of Energy said it will be investing in the creation of new, retrofitted and expanded commercial plants, as well as demonstration and battery recycling facilities. Accompanying these investments will be an additional $60 million to support second-life applications for batteries, according to the agency.

“Positioning the United States front and center in meeting the growing demand for advanced batteries is how we boost our competitiveness and electrify our transportation system,” Energy Secretary Jennifer Granholm said in a statement.

Domestic sourcing of critical materials used to produce lithium-ion batteries could help mitigate supply chain disruptions and bolster battery production in the U.S., the Energy Department stated. While lithium itself is known throughout the sector as “white gold” due to its value and hue, these batteries also contain other key materials, such as cobalt, nickel and graphite. 

Beijing leads the world in the mining and refining of many of these minerals, and they maintain particular dominance in cobalt, according to Elkind.  

“China recognized smartly, very early on, that these lithium-ion batteries using cobalt were going to be the wave of the future — obviously for consumer electronics, but also now for electric vehicles,” Elkind said.

On the other hand, he explained, some car manufacturers, including Tesla, are starting to phase out cobalt and move toward different battery chemistries.  

“There’s going to be demand for cobalt, no question about it,” Elkind said. “But I don’t know if that’s necessarily going to be the sort of the linchpin mineral here going forward.”

What exactly will be that linchpin “may depend on geopolitics,” he said, stressing that lithium will remain the battery’s core. 

Crabtree likewise recognized lithium for its superior performance, noting that despite some other existing alternatives — such as less expensive iron phosphate cathodes — the EV supply chain is “probably never going to get rid of lithium-ion.” 

Although Beijing maintains a stronghold over lithium refining and processing, Elkind described the mineral as “basically ubiquitous” and said that “the U.S. has plenty of opportunities to diversify the lithium supply chain.”

The country’s biggest prospective mining project is located in Nevada’s Thacker Pass, along the state’s border with Oregon. 

Sen. Catherine Cortez Masto (D-Nev.), who helped secure the EV battery funding in the infrastructure deal, said Nevada’s rich mineral and manufacturing industries will help the U.S. compete with China in the global battery supply chain.  

“Nevada’s critical minerals and battery manufacturing industries help us create good-paying jobs, compete with the Chinese government, and boost our innovation economy,” Cortez Masto wrote in a statement to The Hill. 

Cortez Masto also secured a provision in the bipartisan infrastructure bill promoting battery manufacturing and mining industries in her state, according to the Department of Energy. That provision will help keep raw materials mined in Nevada at home for processing, rather than shipping them overseas. 

With a robust domestic mining sector, the U.S. could decrease its dependence on inefficient and expensive imports and would also no longer need to rely on other governments to enforce transparent mining standards, according to Elkind.

Elkind acknowledged that, thus far, domestic mining initiatives have faced pushback from those who live adjacent to prospective mining sites. 

At the center of such a debate is Nevada’s Thacker Pass, which has garnered fierce opposition from certain tribal members who have ancestral roots in the region. 

The People of Red Mountain movement are demanding that the Department of the Interior rescind the project’s permits, arguing that the mine will increase greenhouse gas emissions and deplete water resources in one of the country’s driest regions.

The activists contend that the mine will bring “irreversible harm to the Fort McDermitt Paiute and Shoshone Tribe, ancestral massacre sites, water, air, medicines, and culturally important wildlife.” 

In response, the company behind the mine — Lithium Americas — said that members of the Fort McDermitt Tribe are on site for all cultural treatment processes during the excavation. 

Jonathan Evans, CEO of Lithium Americas, stressed that the company would “create a local workforce and [is] developing one of the most environmentally sound lithium projects in the world.”

Elkind, meanwhile, contended that there are sustainable ways of conducting that mining without “steamrolling over these rural areas and turning them into sacrifice zones.” 

With the proper standards, outreach and consultation with local communities, as well as transparent action and guarantees around environmental protection, Elkind said he believes the government could help accelerate mining timelines. 

“The problem is, if it doesn’t happen here, it’s going to happen internationally where there are many fewer protections,” he said. 

In addition to the executive actions the Biden administration has taken on critical minerals in general, both policymakers and the industry have more specific items on their wish list to improve American competitiveness on battery production, said Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines.  

These include “an expedited process or some kind of process with policy attention on it towards actually siting new mines or enhanced mines in the United States,” Bazilian said. “As well as starting to put up some processing [and] turning those ores into chemicals, which are the things that everybody wants.” 

As domestic manufacturing continues to take on electric vehicle batteries, the industry should keep in mind that “there isn’t necessarily a silver bullet,” Wulf said.

“You can’t just focus on mining. You can’t just focus on processing. You can’t just focus on EV tax credits,” she said. “It’s all of it, all at once, and trying to bring everyone along.”