President Trump has been scornful of electric cars for years. But his administration is now pouring billions of dollars into the battery technology that powers them.
Large lithium-ion batteries have become one of the rare energy technologies that both parties in Washington strongly support — though for very different reasons.
The Biden administration saw batteries as a green energy tool crucial for addressing global warming and sought to encourage manufacturing them, for use in electric vehicles and to backstop wind and solar power on electric grids. The Trump administration has rolled back efforts to expand clean energy, but officials have nonetheless come to see batteries as essential for many of Mr. Trump’s priorities, including powering A.I. data centers and manufacturing drones for the military.
The Trump administration has been particularly alarmed by China’s dominance of global supply chains for lithium-ion batteries, and in recent months has made a major push to bolster domestic production of many battery components and associated critical minerals.
“There has been a growing appreciation for just how important batteries are for so many things,” said Tom Moerenhout, who leads the critical minerals initiative at Columbia University’s Center on Global Energy Policy. “It’s not just E.V.s, it’s automation, robotics, data centers, drones for defense. And there’s a real move to making sure China doesn’t have a choke point here.”
Last week, the Energy Department awarded $500 million to seven companies that make battery components or process critical minerals like cobalt in the United States. Earlier this month, the Pentagon announced a $1.4 billion loan to an advanced battery start-up building a factory in Washington State. Federal agencies are funding various domestic efforts to produce graphite and lithium, two raw materials for batteries.
“For too long, America has depended on foreign actors for critical materials essential to modern life that underpin our economy, energy security, and national security,” Energy Secretary Chris Wright said in announcing the battery awards.
Still, loosening China’s grip on the global battery industry could be difficult without boosting the domestic market for electric cars, which are by far the largest source of demand for lithium-ion batteries, experts said. Last year, Republicans in Congress repealed a $7,500 tax credit for consumers to buy electric cars with U.S.-made components, which provided a significant incentive for domestic battery manufacturing.
“If you really want to onshore supply chains, you need electric vehicles, it’s as simple as that,” said Dr. Moerenhout. “The defense sector alone is just too small to underwrite a full supply chain for batteries.”
For years, the Chinese government has made a concerted effort to lead the world in electric vehicles and heavily subsidize its battery industry. The country now sells roughly as many E.V.s each year as the rest of the world combined, and it has become the pre-eminent producer of lithium iron phosphate batteries, or LFP, which have become widespread in electric vehicles and stationary storage. The country also dominates the refining of raw materials like lithium and graphite and the production of key components like cathodes and anodes.
Many officials in Washington have been eager to reduce dependence on China for national security reasons. The U.S. military uses batteries in lasers, hand-held radios, night vision goggles, satellites and drones, and Chinese components are still needed to make many of these items. Data centers for artificial intelligence are increasingly using lithium-ion batteries for backup power.
China recognizes the leverage it has. Last fall, amid a period of trade tensions, the country threatened to limit exports of a range of battery materials, including graphite, which businesses said would have devastated the nascent U.S. battery industry.
When Mr. Trump returned to office, his administration initially froze billions of dollars in Biden-era grants for battery manufacturing, grouping batteries in with electric vehicles, solar farms, wind turbines and other clean energy technologies that officials wanted to downplay.
But that stance quickly shifted.
While the administration has throttled funding for other clean-energy technologies the Energy Department has allowed many Biden-era grants for battery makers to proceed. The government has also invested in firms that develop battery components or critical minerals, including Eos, a next-generation battery company.
The Trump administration has also been more active than the Biden administration in encouraging U.S. mining, and the government has begun taking direct financial stakes in mining companies. That has prompted pushback from Democrats in Congress, who have called for investigations into some mining deals and raised questions about conflicts of interest.
Earlier this month, Mr. Trump held an event at the White House with mining executives and announced more than $2 billion in funding to help revitalize the domestic mining industry, including for battery materials.
That included a $1.4 billion loan from the Pentagon’s Office of Strategic Capital to Sila Nanotechnologies, a company that has developed a type of lithium-ion battery that uses silicon materials instead of Chinese graphite.
The company has spent nearly 15 years developing its technology, and its factory in Moses Lake, Wash., can now make enough material for tens of thousands of batteries each year. But that’s still only enough to supply less than 0.1 percent of the global market, and Sila is hoping to expand production drastically while competing against ferocious Chinese competition.
“It takes an immense amount of time and effort to expand and do this right,” said Gene Berdichevsky, the chief executive of Sila. “And for investors to bet on that, they need confidence that we have the right policies to support this kind of industry and not just let it go offshore.”
The administration’s moves could end up benefiting electric vehicles and other clean energy industries, too, all of which are increasingly demanding batteries. Large battery installations on the electric grid, which can help smooth out fluctuations in wind and solar power, have increased 70 percent annually over the past three years.
Although a growing number of factories in the United States now manufacture battery modules and cells — in large part because of a Biden-era clean energy law that provided lucrative incentives — the country is still far behind in mining and processing the raw materials that go into those batteries. Experts say scaling up could be tough, in part because refining critical minerals can be highly polluting and U.S. environmental standards can make the process more expensive than it is in China.
In other awards announced by the Energy Department last week, Lilac Solutions will receive up to $100 million for a facility that will extract lithium from the Great Salt Lake in Utah. Jervois, a company that owns a cobalt deposit in Idaho, will get up to $100 million to build the nation’s first cobalt refinery to produce materials for batteries and weapons.
Another $100 million grant would go to Nth Cycle, a company that plans to recycle material from used batteries known as “black mass.” The Trump administration had previously announced that it would block exports of black mass for at least a year, but the United States has limited capacity to refine that material for use in new batteries. Nth Cycle is aiming to get a large new facility operational by 2029.
Megan O’Connor, the chief executive of Nth Cycle, said the company’s refining technology is designed to be nimbler and less polluting than traditional techniques, which could make the facilities easier to permit and build in the United States.
“We’re trying to solve for all the key bottlenecks of why we haven’t been able to build this industry here in the past,” she said.
