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Granholm in Detroit touts Biden plan targeting $3 billion for U.S. EV battery production

May 3, 2022
Crain’s Detroit Business
Nick Manes
May 2, 2022

The Biden administration will invest more than $3 billion from last year’s massive infrastructure bill in an effort to boost domestic production of electric vehicle batteries, according to a plan unveiled Monday.

The funding from the Bipartisan Infrastructure Law will be used to “bolster domestic supply chains, create good-paying jobs, and help lower costs for families,” according to an administration news release, and funds will be provided by the U.S. Department of Energy.

U.S. Energy Secretary and former Democratic Michigan Gov. Jennifer Granholm said during an event in Detroit on Monday that the $3.1 billion being provided by the federal government will actually be doubled to more than $6 billion. That’s because private sector companies will have to match federal funds, which will create a windfall for the sector, Granholm said.

“That’s a lot of money to build out this part of the supply chain,” Granholm said. “And that means that’s a lot of jobs to build out this part of the supply chain.”

The announcement with Granholm, U.S. Rep. Debbie Dingell, D-Dearborn, and various labor leaders, which followed a White House media call, took place at Focus: Hope, a Detroit-based racial justice nonprofit that provides workforce development, senior meal programs, and other programming.

Portia Roberson, Focus: Hope’s CEO, is running for the U.S. Congress as a Democrat in the new 13th District, which encompasses Detroit’s east side, southwest Detroit and parts of suburban Wayne County.

Encouraging the domestic production of battery minerals has been a priority for the Biden administration as it seeks to electrify half of all new U.S. cars by 2030. But surging commodity prices and supply chain snarls remain a challenge. Earlier this spring, the White House invoked the Defense Production Act to spur output of lithium, nickel, graphite, cobalt, and manganese.

The grants will fund new, retrofitted, or expanded processing facilities, as well as manufacturing demonstrations and battery recycling, according to Energy Department officials. A separate $60 million program for battery recycling is also being made available, the agency said.

The money comes from the $550 billion infrastructure bill signed into law last year, which earmarked $7 billion for batteries and the creation of a U.S. supply chain to produce them.

The funds should help to accelerate domestic capabilities around innovation in EV battery production, as well as helping alleviate snarled supply chains, said Glenn Stevens, executive director of industry group MICHAuto and the vice president for automotive and mobility initiatives at the Detroit Regional Chamber.

While U.S. companies have made strides on overall electrification efforts, European and Asian countries are “far ahead,” particularly with regard to innovation, Stevens said.

The grants from the Biden administration, he said, “will only support that and that’s important because this is an innovation race.”

Additionally, Stevens said the grants appear heavily focused on recycling efforts for minerals found in EV batteries.

As of late March, automakers and their battery suppliers have committed $13.5 billion to create EV battery plants in North America, according to a report in Automotive News.

While the transition to electric vehicles is being embraced by many in the auto industry, politicians and others, many in the supply chain have said that because EVs contain far fewer parts, the move away from combustion engines could spell their doom, as Crain’s has reported.

However, Granholm on Monday said the administration’s EV battery initiative could help alleviate some of that pain, particularly in auto-dependent areas like Michigan.

“The ability to bring all the pieces of manufacturing a battery will create an ecosystem,” Granholm told reporters. “But in places like Michigan, where you really have this concentration, it’s a natural place for those jobs to come.”

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