WASHINGTON (AP) — The Biden administration on Wednesday awarded $2.8 billion in grants to build and expand domestic manufacturing of batteries for electric vehicles in 12 states. A total of 20 companies will receive grants for projects to extract and process lithium, graphite and other battery materials, manufacture components and strengthen U.S. supply of critical minerals, officials said.
The announcement comes as the administration seeks to boost production and sales of electric vehicles as a key part of President Joe Biden's strategy to slow climate change and build up U.S. manufacturing. Biden has vowed to boost U.S. production of lithium and other critical minerals, and the sweeping climate and health-care law passed in August includes several provisions to boost electric vehicles, including tax credits for EV buyers worth up to $7,500.
Energy Secretary Jennifer Granholm, who announced the grant competition in May, called the funding announcement "huge" news that would expand made-in-America battery manufacturing for EVs and the electric grid. Projects funded under the grants will "make battery materials and components here at home that we currently import from other countries'' such as China, she said.
In a separate development, German automaker BMW said Wednesday it will invest $1 billion in its sprawling factory near Spartanburg, South Carolina, to start building electric vehicles and an additional $700 million to build a battery plant nearby.
The federal grants announced Wednesday are funded by last year's $1 trillion infrastructure law and are separate from an executive order Biden issued last spring invoking the Defense Production Act to boost production of lithium and other critical minerals used to power electric vehicles.
Albemarle Corp., Piedmont Lithium Inc., Entek and Syrah Technologies are among 20 companies to win Energy Department grants that will help fund projects in at least 12 states: Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee and Washington state.
At least two projects will be located in states that have yet to be selected.
Companies selected for the grants will be required to match the federal investment to "leverage a total of more than $9 billion to boost American production of clean energy technology, create good-paying jobs" and support Biden's goal for electric vehicles to make up half of all new vehicle sales by 2030, the White House said.
Electric vehicle sales are expected to rise dramatically between now and 2030 in the U.S. and globally. But even at the start of the next decade, they will amount to just over one-third of U.S. new vehicle sales.
The LMC Automotive consulting firm expects EVs to represent 5.6% of U.S. sales this year, rising to 13.5% by 2025 and 36.4% in 2030.
Even as Granholm and other officials tout success in boosting the U.S. EV industry, automakers are warning that the vast majority of EV purchases won't qualify for the full $7,500 tax credit.
That's mainly because of the climate law's requirement that, to qualify for the credit, an electric vehicle must contain a battery built in North America with minerals mined or recycled on the continent.
Granholm said the projects announced Wednesday should help the U.S. address that issue and "supercharge the private sector to ensure our clean energy future is American-made.''
Producing advanced batteries and components in the U.S. "will accelerate the transition away from fossil fuels to meet the strong demand for electric vehicles, creating more good-paying jobs across the country," she said.
Associated Press writer Tom Krisher in Detroit contributed to this story.