US Sets Up $3 Billion War Chest to Boost Production of EV Batteries; 30 Firms to Get $50 Million Each

The Biden administration has unveiled plans to spend $3.1 billion on boosting domestic production of electric vehicle batteries and other essential components. This is aimed at reducing the country's dependence on overseas producers, officials said on Monday.

The funding is expected to support plans of domestic companies to construct new factories and rebuild the current ones to make EV batteries and related units. According to the administration, more than 30 companies are in line to receive grants worth at least $50 million each, CNBC reported.

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The funding is a part of the Bipartisan Infrastructure Law enacted in 2021. The Department of Energy has also stated that a supplementary $60 million will be made available for the recycling and reuse of used EV batteries.

As a consequence of Russia's invasion of Ukraine, energy prices are rising higher and higher, the administration therefore has also introduced a shift to clean energy so accomplish 'true energy independence' and to divert the consumer attention from the fluctuations of global oil markets.

According to NBC, Brain Deese, director of the National Economic Council has stated, "we've seen, even just in recent days, [Russian President Vladimir] Putin trying to use Russia's energy supply as a weapon against other nations. And that underscores why it's so important that we in the United States reinvest and re-underwrite our own energy security."

The President has repeatedly stressed on this shift to clean energy as these transitions will prove crucial in the fight against pollution destroying the planet. "We need a lot of batteries, and we want American workers making those batteries right here in America," said national climate adviser Gina McCarthy in a call with reporters.

In a move to stimulate the production of minerals required for EV batteries, Biden called on the Defense Production Act in March, so the government could access more methods to aid the mining, processing and recycling of critical materials like lithium, nickel, cobalt, graphite and manganese.

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However, there have been some concerns regarding this move as China an important player in this market, controls almost 80 per cent of the world's processing and refining of the aforementioned minerals. Senator Joe Manchin III, Democrat of West Virginia, a crucial vote for potential climate legislation in the evenly divided Senate, voiced his "grave concerns" last month about moving toward, "an E.V.-only future."

The NY Times reported that, as of now the Biden administration has set a target for half of all new vehicles sold in the United States to be electric by 2030. Procurement guidelines have also been issued for the transformation of the 600,000-vehicle federal fleet, in order to make sure that all new cars and trucks purchased by the federal government by 2035 fall in the zero-emission category.

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