US Announces $3.5 Billion to Strengthen Domestic Battery Manufacturing

The funding aims to create facilities to support clean energy industries


The U.S. Department of Energy (DOE) has announced funding of $3.5 billion to boost domestic production of advanced batteries and battery materials. The initiative aims to create and upgrade facilities critical for supporting the future of clean energy industries, including renewable energy and electric vehicles (EVs).

Administered by the DOE’s Office of Manufacturing and Energy Supply Chains (MESC), the investment reflects the U.S.’s commitment to achieving a net-zero emissions economy by 2050, with EVs constituting half of all new light-duty vehicle sales by 2030.

The funding will create new, retrofitted, and expanded domestic facilities for battery-grade processed critical minerals, battery precursor materials, battery components, and cell and pack manufacturing.

Batteries are pivotal in the transition to a clean energy economy, reducing energy costs and greenhouse gas emissions for American families and businesses. They are essential for grid storage, ensuring resilience in homes and businesses, and driving the electrification of the transportation sector.

With the lithium battery market projected to increase by five- to ten-fold by the end of the decade, investing in a resilient supply chain for high-capacity batteries, including non-lithium batteries, is crucial.

This funding opportunity marks the second phase of the $6 billion allocated by the Bipartisan Infrastructure Law.

The first phase catalyzed over $5.8 billion in public/private investment through fifteen projects. The current phase aims to strengthen domestic battery manufacturing and supply chains, focusing on:

  • Ensuring a competitive domestic battery materials processing industry.
  • Expanding the nation’s capabilities in advanced battery manufacturing.
  • Enhancing national security by reducing reliance on critical minerals, battery materials, and technologies from foreign entities.
  • Advancing domestic processing capacity for minerals crucial to battery materials and advanced batteries.

The DOE is prioritizing next-generation technologies and battery chemistries, expanding focus areas beyond lithium-based technologies.

This includes precursor production, manufacturing for non-light duty markets, and projects increasing the separation of battery-grade critical materials. The program will continue adapting to market and technology evolution, updating topic areas every six months.

Concept papers are due January 9, 2024, with full applications due March 19, 2024.

Last year, the U.S. Energy Information Administration said power developers and project owners would add utility-scale battery storage capacity of up to 30 GW in the U.S. over the next three years.

Earlier, Mercom reported how in India the Viability Gap Funding program for Battery Energy Storage Systems has been welcomed by industry stakeholders for its potential impact on system cost, demand, and manufacturing in the country.