On September 20th the US Department of Energy (DoE) announced plans to invest more than US$3Bn to boost the domestic battery supply chain. The investment will aim to create thousands of jobs, whilst aiming to elevate the US’s position within the battery sector. 

Following an initial US$1.8Bn funding round, 25 projects have been selected across 14 states for the second round funding package, which spans the entire battery supply chain. Particular emphasis has been placed on the midstream, which is to receive more than US$1Bn (34%) of the total investment. Although cathode and anode active material production projects have received significant investment, both private and federal, since the Inflation Reduction Act was introduced in 2022, gaps persist for domestic production at commercial scale. This much-needed financial support will therefore go towards building active material production facilities and facilitating R&D for advanced technologies. 

A notable standout from the midstream list is for Honeywell, which is aiming to tackle electrolyte salt production in Geismar, Louisianna. Given the typical shelf life for electrolyte is just six months, domestic production is crucially needed for the US. Any delays to shipping or future export restrictions from China could prove to be a major bottleneck moving forward.  

In addition to the midstream, recycling is also being targeted with the package, receiving US$735M (23%) of the total investment. A circular value chain remains at the forefront of decision-making for building a domestic supply chain for the US to retain valuable raw materials and improve ESG credentials. As many recycling projects are often uneconomical, especially during periods of low prices, financial support is required to keep this part of the industry buoyant.