U.S. lithium strategy won’t be enough to meet climate goals, rivals

The U.S. must bolster its lithium battery cell sourcing and manufacturing strategy to compete in the expanding lithium-battery market and reach climate goals, according to Li-Bridge research.

The lithium battery cell market in the U.S. is expected to reach $55 billion per year by 2030, but the current growth pace of domestic sourcing will limit the industry to just 30 percent of that demand, according to a report by Li-Bridge, a public-private alliance by the U.S. Department of Energy and managed by Argonne National Laboratory.

Li-Bridge said its proposed recommendations would capture 60 percent of the economic value from domestic demand of lithium batteries by the end of the decade. That would generate $33 billion in revenue and create 100,000 jobs, according to the group’s report, “Building a Robust and Resilient U.S. Lithium Battery Supply Chain,” published this month.

“Without reliable access to lithium battery technology, the U.S. simply has no chance of meeting the goals of reducing greenhouse gas emissions by 40 percent by 2030 or achieving net zero emissions by 2050,” Li-Bridge said in the report. “The U.S. endangers its position on the global stage if its climate targets are missed or if it is overshadowed by other countries.”

Li-Bridge was established in 2021 by the DOE and Argonne. Industry trade groups NAATBatt International, the New York Battery and Energy Storage Technology Consortium and New Energy Nexus lead Li-Bridge.

The report includes collaboration by more than 40 companies across the automotive, advanced battery, mining, chemical and electric utility sectors.

Recent federal policy initiatives, such as the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, should accelerate U.S. demand for lithium battery components and materials and increase North American production capacity, Li-Bridge said. But the policy moves alone will not make the U.S. a lithium leader. Other countries have already achieved significant expertise in critical minerals and energy materials, the report said.

Li-Bridge made five recommendations for the U.S.:

1. Improve investment attractiveness of U.S. lithium battery technology and production through expanded capex, production, R&D tax and demand incentives, government procurement programs and insurance pools.

2. Support research and development of domestic battery innovation and commercialization by establishing pre-commercial scale production lines, developing industry standards for lithium and providing commercialization support to early-stage U.S. companies developing products related to lithium batteries.

3. Help U.S. companies access critical minerals, energy materials and low-carbon infrastructure through actions such as improving the permit process, accelerating the creation of a national database of critical mineral resources, developing a consortium of companies for purchasing critical battery-related minerals and other materials, establishing an end-of-life battery program and bolstering the National Defense Stockpile for critical minerals and materials.

4. Address knowledge gaps with curriculum development, workforce training, technical exchange programs and a national battery council.

5. Establish an enduring public-private partnership to support a robust lithium supply chain in North America by making Li-Bridge a formal public-private entity tasked with coordinating and executing on the recommendations in the report and creating a central program management office to monitor and coordinate the execution of the recommendations.
 

“The public-private partnerships described in this report will be crucial to realizing that safer, cleaner future that will benefit generations of Americans to come,” Deputy U.S. Energy Secretary David M. Turk said in a statement.

Adoption of the report’s recommendations is key to the success of the U.S. battery manufacturing and supply chain, Argonne Laboratory Director Paul Kearn said in the statement.

More than three-quarters of lithium battery cells and most of their components are made in China, Li-Bridge said.

The U.S. will miss its 2050 net-zero carbon emissions goal and will fail to ensure an inclusive and socially responsible industry without reliable access to lithium battery technology, the report said. Li-Bridge warned that national security could be at risk as U.S. defense becomes more reliant on lithium batteries.

The U.S. is still one to two decades behind Asia and about five years behind Europe in commercialization of lithium battery manufacturing, James Greenberger, executive director at NAATBatt International, said in the statement. “The electrochemical storage of electricity will be as important a technology to the economy of the 21st century as the semiconductor chip has been,” he said.