The adoption of electric vehicles is a priority for the Biden-Harris Administration, and they have set a very ambitious goal: increasing the EV market share to 50% of all vehicle sales by 2030. President Biden also plans to decarbonize the 600,000 vehicle federal fleet by 2035, replacing them all with EVs. However, to achieve the mainstream adoption of EVs in the US, there are two critical requirements:
- Having adequate charging infrastructure for millions of EVs.
- Creating a solid domestic supply chain of EV batteries.
The federal government is aware of these requirements, and multi-billion dollar funds have been announced to help meet them. The EV Charging Action Plan includes a $7.5 billion fund to help deploy 500,000 EV charging stations throughout the US, where $5 billion will be provided for states and $2.5 billion for key corridors and the communities around them.
However, the US must also be capable of manufacturing the millions of batteries needed to support a large EV market. Early in May 2022, the Biden-Harris Administration announced a $3.1-billion fund to support domestic battery manufacturing and recycling. Although the EV market is growing in the US, automakers still depend on offshore mining and manufacturing. Critical materials like lithium and cobalt come mostly from overseas, the the Biden-Harris Administration wants to enhance local supply chains.
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Both funds can benefit developers who plan to install EV charging stations in their next building projects. A qualified design firm like NY Engineers can help you qualify for grants and incentives, and this includes any new programs created as a result of the $5 billion in state funding. On the other hand, the $3.1-billion fund only benefits battery manufacturers directly. However, charging station owners will also benefit indirectly as the number of EVs in circulation increases - each new EV owner becomes a potential customer.
Why Local Battery Manufacturing is Key for the American EV Market
The COVID-19 supply chain revealed the fragility of global supply chains. Energy markets were already suffering from high inflation, and the conflict between Russia and Ukraine has added even more volatility.
- Renewable generation, energy storage and electric vehicles can help the US minimize the impact of these external factors.
- For example, building owners who generate their own power and charge their own EV fleet are affected much less by expensive gasoline and high electric tariffs.
Solar panels and wind turbines are now capable of generating electricity at much lower cost than fossil fuels. However, these generation technologies depend on energy inputs that cannot be controlled, while fossil fuels can be stored and used at any time - this applies for both transportation and power generation.
Batteries have the same scale flexibility that has made solar panels so successful. They can be sized with multiple megawatt-hours of capacity for grid applications, or with just a few kilowatt-hours of capacity to be used in homes and electric vehicles. With battery storage, the transportation sector can potentially operate with renewable electricity instead of fossil fuels.
The $3.1-billion fund announced by the Biden-Harris Administration will be used to enhance local battery manufacturing capacity, and it will be managed by the US Department of Energy. This includes grant funding for the construction of new facilities, and also for retrofits and capacity expansions at existing facilities. There is also a smaller $60 million fund, which will be used for battery recycling programs.
According to a New York Times article, the US has enough mineral resources and manufacturing capacity to create a local EV battery supply chain, fully independent from external sources. The US lithium-ion battery market could become 20 to 30 times larger within the next decade, but only if there is a robust supply chain to support its growth.