Not only do lithium-ion batteries power everyday devices like cell phones and laptops, they’re a crucial part of America’s alternative energy strategy, shifting away from fossil fuels used in everything from electric vehicles to solar panels to energy storage.
The Biden administration has been pushing to boost U.S. lithium battery manufacturing capacity for more than a year. The effort includes funding and resources for domestic lithium mining and the entire supply chain, including processing and manufacturing of batteries for electric vehicles.
The aim is to reduce the country’s dependence on foreign lithium supplies and increase the country’s energy self-sufficiency. But to get there, the US will need to drastically expand its domestic lithium production base.
The National Blueprint for Lithium Batteries 2021-2030, developed by the Federal Consortium for Advanced Batteries (FCAB), outlines the country’s plans to boost investment in the lithium supply chain, beginning with mining and including processing and production.
Aimed at improving processing, procurement and workforce development in the industry, the blueprint lays out the Biden administration’s path toward a more sustainable energy future and the supply and operations that will require it. But with limited access to the world’s lithium supplies right now, it’s going to be an uphill battle.
Sourcing lithium domestically is a ‘huge undertaking’
The US’s only existing lithium producer is in Nevada, and the country holds an estimated 3.6% of the world’s lithium reserves, according to the US Geological Survey. Most of the world’s lithium production is in China, and consultancy Wood Mackenzie estimates that the country accounts for nearly 75% of the world’s lithium-ion battery production capacity, as well as some of its lithium reserves. Other lithium reserves are mostly in Australia, Chile and Argentina.
Foreign power in the industry means the US has to source most of the lithium it needs abroad.
Global demand for lithium-ion batteries is also growing as other nations switch to alternative energies to combat the climate crisis. With this surge in demand, the market is projected to be worth $100 billion in the coming decades, said David Howell, acting director and deputy chief director of the Office of Manufacturing and Energy Supply Chains at the Department of Energy and chairman of the FCAB.
Much of that demand comes from the booming global EV market, whose sales hit historic levels last year and are on track to do so again in 2022, according to the International Energy Agency. The Biden administration last year set a goal for half of the new cars sold in the United States to be zero-emission vehicles by 2030.
The government has also introduced consumer financial incentives for automakers that source critical minerals in North America. But domestic supply is far from meeting demand.
“Where’s the supply? We don’t make electrode materials,” said Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science at Argonne National Laboratory and associate director of the Joint Center for Energy Storage Research. “We don’t make any materials that flow into the rest of the battery. We do not process the minerals. We don’t even dismantle them.”
Where are the world lithium reserves?
Top ten countries hosting lithium reserves by percentage of total supply.
While trying to source commodities like lithium domestically is a great idea, it’s also a huge undertaking, said Charlie Welch, founder and CEO of battery developer ZapBatt. Starting new mining operations is an expensive and politically sensitive undertaking.
“Even if we flip the switch and say the US will do this overnight,” he said, there are many hurdles, including cost and environmental issues. “It’s not easy to get certain things out of the ground.”
Still, automakers were under pressure to produce at home. The Biden administration is offering a $7,500 electric vehicle tax credit if the battery is made predominantly from materials sourced or processed in the United States
“Every automaker talks about their fleet going to be mostly electric by 2030,” Srinivasan said.
To speed up domestic production, the President has announced a series of investments to shore up manufacturing. The government awarded $2.8 billion in grants last month to boost production of EV components such as lithium materials.
In Numbers: A Snapshot of EV and the Critical Mineral Funding of the Bipartisan Infrastructure Bill
7 billion dollars
The amount set aside to fund improvements in the country’s battery supply chain.
The amount of funding for mapping critical minerals.
Financing of the first US refinery for the extraction and separation of rare earth elements and critical minerals.
To help carry out more of these plans and investments, the government also established Li-Bridge, a public-private partnership operated by Srinivasan and Argonne National Laboratory, to help achieve the goals set out in the draft. With Li-Bridge, “the goal is to bridge the gap between battery supply and growing demand,” he said.
Li-Bridge aims to bring together industry stakeholders to collaborate in building the lithium supply chain. It has worked to align the federal government’s vision with that of the private sector, to understand bottlenecks in the industry and what needs to be done to meet the federal government’s goals, Srinivasan said.
Pulling off the new supply chain requires innovation
However, to address capacity issues, innovation breakthroughs are required. For example, some researchers have developed batteries that use less critical minerals, including not only lithium but also cobalt and nickel.
“There are innovative chemicals that don’t use cobalt and don’t use nickel,” Howell said. “And some of these are on the market today. Lithium iron phosphate batteries use lithium but contain no cobalt or nickel.”
Research into new designs must be done simultaneously with expansion of current production to ensure continuous improvement, Srinivasan said. “We have to think of all the parts at the same time.” he remarked.
“Where’s the supply? We do not manufacture electrode materials. We do not manufacture any materials that flow into the rest of the battery. We do not process the minerals. We don’t even dismantle them.”
Director, Argonne Collaborative Center for Energy Storage Science at Argonne National Laboratory
Recycling has also emerged as a possible solution to meet demand. Biden’s draft also includes plans to develop larger recycling capabilities that can capture more useful battery minerals, Howell said.
The goal of the blueprint is to incentivize companies to achieve 90% recycling of consumer electronics, electric vehicles and grid storage batteries by 2030.
However, as the supply of recycled materials is expected to be unable to meet demand, other companies are looking at alternative formulations for their batteries.
“There’s often a race to invent a brand new battery, a miracle battery,” Welch said.
Welch’s ZapBatt is engineered with lithium titanate technology to produce a faster charging battery with a longer lifespan. Originally developed for military use, the batteries can be recharged in less than 20 minutes while going through 15,000 charge cycles, he said.
Will the US succeed?
For many industry observers, the US government’s multifaceted approach to building a sophisticated lithium supply chain is a good start, but many challenges remain. Srinivasan is reassured by the number of small businesses with hundreds of millions of dollars worth of battery manufacturing capabilities and auto companies setting up new battery plants in the US. He sees recyclers getting capital to start collecting and recycling cells and batteries.
“Five years ago, I was agonizing over this, thinking it was just a bunch of research and development,” Srinivasan said. “[I thought]’How are we ever going to make a difference in the real world?’”
While recycling and a circular economy are important, they’re “not a silver bullet,” Welch said. “We can hardly recycle Tupperware at the moment.”
More effort should be made to ensure batteries last long in the first place, he said. With all the energy being put into mining and acquiring scarce minerals, the emphasis on longer battery life would encourage manufacturers to make efficient use of available materials and move away from a “fast-fashion battery economy.”
But as companies large and small rush to find solutions, a growing number of stakeholders are cautiously optimistic that mineral production can be scaled sustainably.
“I’m super excited. I’m more hopeful,” said Srinivasan. “I have never experienced such a time.”