The Biden administration on Monday announced a $3.1 billion effort to ramp up the domestic production of batteries essential to electric vehicles.
Under the plan, $3.1 billion in grants will go to private companies to build, upgrade or expand their battery processing facilities. Another $60 million is earmarked for battery recycling, according to the White House.
“This is what we need in the United States, where our competitors and other countries are not standing pat, but moving ahead and now we are doing the same,” Brian Deese, director of the White House’s National Economic Council, told reporters.
White House officials did not say how many companies would receive the grants or if any businesses have already received funds.
The program is funded out of the $7 billion set aside to improve the domestic supply chain as part of President Biden’s $1 trillion infrastructure law.
The White House is pitching the program as a way to combat surging energy prices caused by Mr. Biden’s ban on federal land drilling and Russia’s invasion of Ukraine.
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Consumers are paying an average price of $4.19 per gallon for gasoline as of Monday afternoon, according to data from the automobile group AAA. That represents a slight decrease from $4.20 per gallon last month and a sharp increase from the $2.90 per gallon consumers were paying last year.
However, given the length of production for electric vehicle batteries, it’s unlikely the funds will help in the short term. Consumers have been shunning electric vehicles which account for only 4% of new vehicle sales in 2021.
White House officials also say the move will help minimize the U.S. dependence on foreign supply chains.
Mr. Biden last month invoked the Defense Production Act to boost the domestic production of the minerals needed to make electric batteries.
The order enables companies to receive government funding for feasibility studies on projects that extract the minerals needed for electric vehicle battery production, including lithium, nickel, cobalt, graphite and manganese.
Demand for these minerals has soared as automakers increase their electric vehicle production. Mr. Biden last year announced a new national target for electric vehicles to make up half of new automobile sales by 2030.