In an era where technological advancement drives economic and national security, the supply chains powering these innovations have never been more critical. Among the many essential components, batteries stand out as an enabling technology for most every emerging technology. Recognizing this importance, the U.S. government is making significant investments to strengthen domestic battery supply chains, reducing reliance on foreign sources and bolstering national resilience.
The Current Landscape: A Heavy Reliance on Foreign Supply Chains
China currently dominates the global battery market, controlling 70-90 percent of the global market share—from raw materials to final assembly. This reliance poses economic and strategic risks for the U.S., particularly in the face of geopolitical tensions. To mitigate these vulnerabilities, the federal government is prioritizing onshoring battery manufacturing and developing a robust domestic supply chain. These efforts are critical not only for economic security but also for maintaining technological leadership in an increasingly competitive global landscape.
Federal Investments: A Comprehensive Approach
To address the challenges and opportunities in battery supply chains, the U.S. government has committed billions of dollars across several key areas:
- Electric Vehicle Batteries: Electric vehicles are at the forefront of the energy transition, and the demand for EV batteries is skyrocketing. The DOE has announced nearly $3 billion in funding to support EV battery manufacturing and innovation, ensuring that the U.S. can meet the growing demand while reducing its carbon footprint. The Department has also provided funding to retool legacy automotive plants to support the manufacturing of electric and hybrid vehicles and their corresponding supply chains.
- Advanced and Military Applications: Beyond EVs, advanced batteries are critical for military and aerospace applications, enabling more efficient and durable energy storage solutions. Federal initiatives are fostering innovation in next-generation battery technologies, such as sodium-ion, solid-state, and flow batteries, which promise greater energy density and reliability.
- Battery Recycling: Recycling is another cornerstone of the government’s strategy. In September, the DOE invested over $3 billion across 25 projects to boost domestic production of batteries and recycling of battery materials. Further, the DOE recently announced investments totaling over $60 million in battery recycling technologies to recover valuable minerals such as lithium, cobalt, and nickel. This not only reduces dependence on overseas mining but also promotes sustainability by extending the lifecycle of critical materials.
- Lithium Battery Safety: One of the biggest hurdles to integrating lithium-ion batteries into more advanced technology use cases has been the fire risks associated with thermal runaway. Research teams at Sandia National Laboratories and NIST have been working on AI-enabled technologies that detect defects and thermal runaway failures before the battery causes a dangerous fire. Continued advancements in battery safety technologies will allow for further adoption of lithium-ion batteries into emerging and defense technologies.
A Holistic Vision: Strengthening the Entire Supply Chain
These investments reflect a strategic shift towards addressing every stage of the battery lifecycle, from raw material processing to end-of-life recycling. This holistic approach ensures that the U.S. is not merely assembling batteries domestically but also securing the raw materials and technologies necessary for long-term competitiveness.
This strategy parallels efforts in the microchip industry, where significant government funding has been allocated to onshore semiconductor manufacturing through the CHIPS and Science Act. Both sectors highlight a growing recognition among policymakers that critical technologies must be produced domestically to safeguard economic and national security.
The Road Ahead
As the U.S. continues to invest in battery supply chains, the implications extend far beyond economics. These efforts signal a commitment to sustainability, innovation, and resilience in the face of global challenges. Policymakers and industry leaders alike must now build on this momentum, ensuring that these investments translate into a competitive and secure future.
Batteries, much like microchips, are poised to remain a focal point of the federal government’s focus on supply chain resiliency. By prioritizing domestic production and innovation, the U.S. is laying the groundwork for leadership in critical technologies, ensuring that the nation is prepared to meet the demands of the 21st century and beyond.
Read More:
- Public Spend Forum’s Market Report on the Battery Manufacturing Ecosystem
- Winning the Battery Race: How the US Can Leapfrog China to Dominate Next-Generation Battery Technologies
- CSIS: Friendshoring the Lithium Ion Battery Supply Chain
