For much of the last few decades, we’ve been hearing that American manufacturing is on the decline. But in reality, this isn’t always true. Recently there’s been a boom in one industry in particular: lithium-ion battery manufacturing. Since 2021, 15 new lithium-ion battery factories have been announced across the South and Midwest, forming what’s now known as the “Battery Belt.”
Lithium-ion batteries (sometimes called li-ion batteries for short) are used in, well, almost everything electronic. Smartphones, laptops, e-bikes, electric vehicles, pacemakers, medical devices—all of these have lithium-ion batteries. These batteries are rechargeable, lightweight, and they hold a lot of energy, making them excellent for anything that needs reliable remote power. A lot of the technologies we use today wouldn’t be possible without these batteries.
Not only are li-ion batteries important for our daily lives, they are an important part of electrification of our homes and the power grid more generally. Transitioning our energy usage to renewable electricity is a major part of cutting greenhouse gas emissions and fighting climate change. But in order to make this transition, we need a way to store power generated from solar and wind sources for later use. Currently, this is best achieved with lots of lithium-ion batteries.
While the US has had some battery factories since the early 2000s, the rapid growth of the Battery Belt can be linked to a few specific economic and political circumstances.
First, US trade relations with China have soured over the past decade, which has put a strain on the lithium-battery supply chain. The US imports about 87% of its lithium-ion batteries from China. No other country can currently produce enough batteries to supply the US market, and so as the political relationship with China becomes frayed, the need to create a domestic supply chain has become extremely clear and pressing.
Second, the Biden Administration has made domestic battery manufacturing a priority. The Bipartisan Infrastructure Law and the Inflation Reduction Act both provide massive subsidies and support for the development of battery manufacturing. These bills have incentivized corporations to build new factories in the US, which may have otherwise been too costly. Interestingly, the Biden Administration just recently unveiled guidance that seeks to exclude Chinese entities from benefiting from the tax incentives available in these bills, which will spur even more urgency to build up domestic manufacturing.
Third, there has been a massive increase in demand for li-ion batteries, specifically for electric vehicles. Demand for EVs has been slowly on the rise since they hit the market, but now, with IRA tax breaks and a slew of new vehicles available for purchase, this demand is rising rapidly–about 65% from 2021 to 2022, in fact. And with that demand increase, we’re going to need a lot of batteries.
Making batteries in the US has a lot of benefits compared to importing them. Making batteries here will simplify and stabilize the supply chain, create manufacturing jobs, and allow for a more circular battery economy in the US.
Lithium-ion batteries are flammable and can become unstable when damaged, so they are subject to a lot of transportation regulations. This makes the process of shipping them across the world expensive and complicated, and long shipping routes generate a lot of emissions. Even domestically, the closer to the end use these batteries can be produced, the better.
This is one reason the Battery Belt landed where it did. Many of these battery factories are in areas that have historically had a strong car manufacturing presence, or they are near newer EV-focused factories. So as even more car manufacturers start producing EVs, the battery factories will be nearby. Many of these new factories also build other components for EVs!
The growth in the Battery Belt is also creating a lot of jobs in the green energy sector! So far, it’s estimated that the new factories will create 70,000 jobs across the country, with more likely to come. These jobs will be very beneficial to the communities where the factories are located.
Another important part of domestic production is actually recycling. Lithium-ion batteries require lithium and cobalt to make. The mining of these minerals is energy-intensive and often quite detrimental to the environment and communities around the mines. These mines, especially the ones located in countries without strict labor and environmental regulations, are something we should be concerned about. There are proposals to build domestic lithium mines, but each proposed location comes with environmental and conservation concerns. No matter what, lithium mining is rough on the environment.
This is why battery recycling is so important. The minerals in lithium batteries can be reused, and thankfully, recycling facilities are starting to pop up near battery factories. These facilities help to create a circular system for battery production, meaning that the materials needed are kept in circulation over a long period of time. Not only will this secure the supply chain for batteries even further, but it will help to fight climate change long-term by responsibly using materials and limiting the toll taken by mining.
The massive investments in the Battery Belt are also incentivizing research into new battery technologies. While lithium-ion batteries are the standard now, they’re not the only option for the future. The car industry specifically is interested in viable battery alternatives, especially because of the concerns over lithium mining and sourcing. With this surge of investment and development of a skilled domestic workforce, the possibility for advancement and innovation in the battery industry is sky-high.
The energy transition from fossil fuels to electricity, in the US and globally, is central to stopping climate change and ensuring our planet’s future. This transition will require a whole lot of batteries, so the development and success of the Battery Belt is very promising for our electrified future.