U.S. Awards $3 Billion for EV Battery Production to Counter China

The Biden administration has announced more than $3 billion in funding to U.S. manufacturers to ramp up production of advanced batteries and materials for electric vehicles (EVs).

The move aims to reduce China’s dominance in global battery production, a key sector for EVs and other electronics.

The grants will support 25 projects across 14 states, including Michigan, North Carolina, Ohio, Texas, South Carolina, and Louisiana. These states are politically significant, with many considered battlegrounds in upcoming elections.

This funding marks the second round of grants under the bipartisan infrastructure law passed in 2021. Previously, $1.8 billion was allocated for 14 projects. While the current round is almost double this, it is smaller than expected due to some projects being withdrawn or rejected during negotiations.

The $3 billion initiative is part of a broader effort by President Joe Biden and Vice President Kamala Harris to promote EVs and fight climate change while building U.S. battery manufacturing capacity. Companies receiving the grants will focus on processing lithium, graphite, and other materials used in EV batteries, as well as manufacturing key components.

“Today’s awards move us closer to achieving the administration’s goal of building an end-to-end supply chain for batteries and critical minerals here in America,” said White House economic adviser Lael Brainard. She emphasized that the initiative is essential to reducing China’s influence in this critical sector.

The Biden-Harris administration is “committed to making batteries in the United States that are going to be vital for powering our grid, our homes, businesses, and America’s iconic auto industry,” Brainard added during a briefing.

This new round of funding brings the total U.S. investment in domestic battery and critical mineral supply chains to nearly $35 billion, according to Brainard. Projects range from lithium mining in Nevada and North Carolina to battery factories in Michigan and Ohio, and the production of rare earth elements and magnets in California and Texas.

“We’re using every tool at our disposal, from grants and loans to allocated tax credits,” Brainard said, noting that since Biden took office, the administration has leveraged more than $100 billion in private investment.

China currently controls much of the global supply chain for key minerals like lithium, rare earth elements, and gallium, making the U.S. and its allies vulnerable. The U.S. has responded with “tough, targeted measures” to counter China’s dominance. Just last week, tariffs on Chinese imports of critical minerals such as graphite were increased, Brainard said.

Energy Secretary Jennifer Granholm echoed the administration’s commitment: “We’re committed to making batteries in the United States of America.”

The 25 projects supported by the new grants are expected to create 8,000 construction jobs and 4,000 permanent positions. Companies receiving funds must match the grants on a 50-50 basis and invest at least $50 million, according to the Energy Department.

This article includes reporting from The Associated Press