Biden administraion officials are taking a kitchen sink approach to boosting production of electric vehicle batteries and components — and the effects could be political as well as economic.
Catch up fast: The Energy Department on Thursday conditionally approved $9.2 billion in loans for a joint battery manufacturing venture between Ford and South Korea's SK On.
- It will help finance two factories in Kentucky and one in Tennessee to supply Ford and Lincoln-branded EVs.
Why it matters: It's the largest award ever from the clean tech loan office. And it arrives amid an increasingly intense geopolitical race to capture the economic benefits of the shift to EVs.
💭 Our thought bubble(s): Some deep thoughts about the announcement...
1. Team Biden is really into batteries. It's the latest of several loan office efforts — like this, this and this, to name some — to boost domestic battery, component and raw materials production and recycling.
- But that's just part of the picture. The Biden administration is also doling out grants for component and raw materials-related projects.
- The Democrats' climate law has major tax incentives for clean tech manufacturing — and automakers and battery companies are taking full advantage.
2. The politics are getting interesting. EV and battery-related manufacturing projects — and other clean tech facilities — are proliferating in red states.
- GOP governors like Georgia's Brian Kemp are keen to make their states hubs of emerging sectors — potentially eroding partisan energy differences in the process.
- But Donald Trump has bashed EVs. Capitol Hill Republicans, meanwhile, want to cut climate tech incentives as they seek to curb spending.
- House Republicans are also scouring various grant awards for any links to China, Axios Pro: Energy Policy's Jael Holzman reports.
3. For automakers, there's no turning back. Auto giants are pot-committed on EVs and related manufacturing.
- Along with battery companies and various startups, they're sinking huge investments into the tech.
🧮 One wild stat: Last October, a Dallas Fed analysis showed over $40 billion worth of planned investments in large U.S. lithium-ion battery plants.
Now, Dallas Fed economist Michael Plante tells Axios, the tally exceeds $77 billion.
The bottom line: The U.S. remains behind China in the battery race — and China dominates materials processing — but a domestic supply chain is taking shape.
