Infrastructure Legislation Provides New Opportunities for Lithium-Ion Battery Producers
Washington, D.C. (November 16, 2021) – On November 15, 2021, President Biden signed the $1.2 trillion infrastructure package into law, providing significant funding for renewable energy and electric vehicle infrastructure, including lithium-ion battery storage and recycling technology, along with funding for transportation, electric grid, broadband, and water infrastructure upgrades.
This substantial investment in renewable and electric vehicle infrastructure triggers an immediate need for domestic lithium, the only truly non-replaceable element in lithium batteries. Currently only 1% of U.S. lithium demand is satisfied by domestic production primarily because accessing these domestic resources is constrained by permitting and oftentimes local opposition. The United States also lacks processing capacity, requiring most U.S. product to be sent to China for processing, but tariff issues and costs make this unsustainable and raise national security and supply chain concerns.
To provide for increasing lithium and lithium-ion battery demand, the United States must accelerate current lithium production, including domestic lithium mining, processing, and manufacturing. Industry leaders involved in lithium-ion battery technology should be aware of the various programs being established by the new legislation, which provide funds for research and development in this key emerging market.
The newly authorized legislation presents the following funding opportunities for fueling the lithium-ion battery industry:
- $3 billion for a research program to ensure that the United States has a viable domestic manufacturing and recycling capability to support and sustain a North American battery supply chain.
- $60 million in multi-year grants to eligible entities for research, development, and demonstration projects to create innovative and practical approaches to increase the reuse and recycling of batteries.
- $200 million to establish an electric drive vehicle battery recycling and second-life applications program that seeks to support the development of advanced manufacturing technologies that have the potential to improve the competitiveness of the United States in the international electric vehicle battery manufacturing sector.
- $500 million in grants for energy efficiency improvements in public school facilities, of which a portion will be dedicated towards the purchase or lease of alternative fueled vehicles to be used by a school, including school buses, fleet vehicles, and other operational vehicles.
Additional funding for lithium-ion battery technology is up for consideration in the 2022 Energy and Water Development and Related Agencies Appropriations Bill.
Clearly, Congress considers the investment in lithium-ion battery research, manufacturing, storage, and recycling as a priority issue for the significant effect it can have on domestic markets and national security. Lewis Brisbois’ Government Relations and Lithium-Ion Battery Practices are prepared to assist industry leaders, who are in a prime position to take advantage of the national effort to expand the U.S. lithium-ion market. For more information on this topic, contact the authors of this alert.
Karen C. Bennett, Partner
James R. Doyle, Partner
Trevor Ingold, Partner
Scott Lee, Partner
Jane C. Luxton, Managing Partner
Sebastian D. Torres, Associate