US awards $2.8 billion in EV battery grants to 12 states

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WASHINGTON (AP) – The Biden administration on Wednesday awarded $2.8 billion in grants to build and expand domestic production of electric vehicle batteries in 12 states. A total of 20 companies will receive grants for projects to extract and process lithium, graphite and other materials for batteries, manufacture components and boost the US supply of critical minerals, officials said.

The announcement comes as the administration seeks to increase production and sales of electric vehicles as a key part of President Joe Biden’s strategy to slow climate change and boost U.S. manufacturing. Biden has pledged to increase US production of lithium and other critical minerals, and the comprehensive climate and health care bill passed in August includes several provisions to boost electric vehicles, including tax credits for buyers of electric vehicles worth up to $7,500.

Energy Secretary Jennifer Granholm, who announced the grant competition in May, called the funding announcement “tremendous” news that will expand American-made battery production for EVs and the electric grid. The grant-funded projects will “make at home battery materials and components that we currently import from other countries,” such as China, she said.

In a separate development, German carmaker BMW said on Wednesday it would invest $1 billion in its large factory near Spartanburg, South Carolina, to begin producing electric vehicles and an additional $700 million to build a battery factory nearby.

The federal grants announced Wednesday are funded by last year’s $1 trillion infrastructure law and are separate from an executive order Biden issued last spring calling on the Defense Production Act to boost production of lithium and other critical minerals used to power electric vehicles.

Albemarle Corp., Piedmont Lithium Inc., Entek and Syrah Technologies are among 20 companies that have won Department of Energy grants that will help finance projects in at least 12 states: Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee and Washington.

At least two projects will be located in countries yet to be selected.

Companies selected for the grants will have to match the federal investment to “collectively leverage more than $9 billion to boost U.S. manufacturing of clean energy technologies, create good-paying jobs” and support Biden’s goal of electric vehicles accounting for half of all new vehicle sales by 2030 , the White House announced.

Electric vehicle sales are expected to increase dramatically between now and 2030 in the US and globally. But even at the start of the next decade, they will account for just over one-third of new vehicle sales in the US.

Consulting firm LMC Automotive expects electric vehicles to account for 5.6% of US sales this year, rising to 13.5% by 2025 and 36.4% in 2030.

Even as Granholm and other officials tout the success of boosting the U.S. electric vehicle industry, automakers caution that the vast majority of EV purchases will not qualify for the full $7,500 tax credit.

This is largely due to climate law requirements that, to qualify for the credit, an electric vehicle must contain a battery made in North America with minerals mined or recycled on the continent.

Granholm said the projects announced Wednesday should help the US address that problem and “strengthen the private sector to ensure our clean energy future is made in America.”

Manufacturing advanced batteries and components in the U.S. “will accelerate the transition away from fossil fuels to meet strong demand for electric vehicles, creating more good-paying jobs across the country,” she said.

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Associated Press writer Tom Krisher in Detroit contributed to this story.