U.S. Energy Department Invests $3 Billion to Bolster U.S. Battery Supply Chain

The U.S. Energy Department on Sept. 20 announced over $3 billion in funding for 25 projects across 14 states aimed at strengthening domestic production of advanced batteries and battery materials. This initiative will focus on retrofitting, expanding, and building new facilities for processing critical minerals, manufacturing battery components, and recycling.

The selected projects reflect the Biden administration’s emphasis on clean energy and economic competitiveness. Nearly 90 percent of the projects are located in or near disadvantaged communities, advancing the Justice40 Initiative, which aims to direct 40 percent of the benefits from certain federal climate investments to these communities.

More than half of the 25 selected projects have either committed to or already signed project labor agreements, while 10 have secured a labor agreement or a neutrality pledge, reinforcing the Biden administration’s goal of creating good-paying jobs as part of the clean energy transition.

This $3 billion investment builds on a prior round of funding, which resulted in the award of $1.82 billion for 14 projects focused on extracting and manufacturing key battery materials, including lithium and graphite, and advancing the recycling of battery components. Many of these projects are already under construction, with one facility currently operational.

As part of its Battery Materials Processing and Battery Manufacturing and Recycling Program, the department is enabling $16 billion in total investment, aiming to build a secure, resilient battery supply chain to support the growing demand for electric vehicles and clean energy technologies.

Since the start of the Biden administration, the private sector has committed $120 billion to the electric vehicle supply chain, underscoring the importance of the department’s efforts in ensuring U.S. energy security and enhancing its global competitiveness in the clean energy industry.

By the end of 2023, cumulative investment in the North American battery and EV supply chain surpassed $250 billion, according to the Energy Efficiency and Renewable Energy Office. This surge followed the passage of the Infrastructure Investment and Jobs Act in November 2021 and the Inflation Reduction Act in August 2022. Battery cell production made up about half of this total investment, with EV assembly contributing 22 percent and minerals accounting for 12 percent.