DOE's $15.5 billion battery manufacturing infusion anticipates US EV surge

The news: The US Department of Energy (DOE) has earmarked $15.5 billion to ignite the electric vehicle (EV) transition, part of President Biden's Investing in America strategy. 

Why it’s worth watching: This financial windfall offers an unprecedented springboard for automakers and suppliers. 

• The sum is divided into $12 billion for automotive conversion projects and $3.5 billion to broaden domestic battery production in time to meet aggressive EV adoption targets.
• The funds and incentives can help automakers retool existing car plants for EV production. 
• The deal should help secure manufacturing jobs in conservative states like Georgia, North Carolina, and Tennessee.
• The Biden administration also committed $5 billion to build 500,000 EV charging stations in February.

How it works: Grant applications can be submitted through the DOE's Office of Manufacturing and Energy Supply Chains, and loans through the DOE's Loan Program Office.

• Concept papers are due October 2, 2023, and the deadline for full applications is December 7, 2023.
• $12 billion in funding will tilt toward enterprises rooted in communities with a storied automotive past, as well as projects pledging robust wages and upholding collective bargaining agreements.
• $3.5 billion will go toward expanding domestic manufacturing of batteries for EVs, reducing reliance on imported materials and components. 

The caveat: Preference for grants and loans given to existing automotive communities could deprive other locations eager for industrial revival that lack an automotive production history.

Our take: The DOE’s EV battery manufacturing fund helps address a pressing need for onshoring lithium battery production. Further investments should also focus on improving the poor state-of-charging infrastructure as well as providing incentives for EV manufacturers and buyers.