The Biden administration awarded US$2.8Bn of grants to boost domestic production of electric vehicle (EV) batteries and component materials across 12 states, in a bid to reduce the US reliance on supplies from China.

Albemarle is one of 20 manufacturing and processing companies receiving grants from the US Energy Department to boost domestic mining of lithium, graphite and nickel, and to build large-scale lithium processing, cathode and other battery material facilities, including recycling. These grants form part of the previously agreed US$1 trillion infrastructure bill passed with bipartisan support back in 2021.

In numbers released by the US Department of Energy, the approved projects will eventually supply enough lithium to produce 2 million EVs, enough graphite for 1.2 million EVs and enough nickel for 400 thousand EVs per year. They will also build the first large-scale commercial lithium electrolyte salt production facility in the US and supply around 45% of the domestic demand for binders for EV batteries by 2030.

These are clearly numbers that have already been announced, albeit now with greater detail on their deployment. The biggest issue any of these investments have in contributing towards a secure domestic supply is the degree to which they ultimately still rely on China supply, even if only by way of a benchmark China cost of supply when it comes to justifying domestic supply chain investment.

The other wrinkle in the legislation is how much “new” investment and capacity is actually delivering value for money to the taxpayer. Not all of the grants are going to result in new and previously unfunded projects, some will subsidise existing developments and therefore largely profit existing investments rather than "green lighting" new capacity.