Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0781
    -0.0013 (-0.12%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2625
    +0.0003 (+0.02%)
     
  • USD/JPY

    151.3430
    -0.0290 (-0.02%)
     
  • Bitcoin USD

    70,066.02
    -548.88 (-0.78%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

How the Biden administration is helping to boost domestic battery manufacturing

David Howell, acting director at the Department of Energy's Office of Manufacturing and Energy Supply Chains, discusses the Biden administration providing $3.1 billlion towards the U.S. battery shortage.

Video Transcript

[MUSIC PLAYING]

RACHELLE AKUFFO: Welcome back to "Yahoo Finance Live" everyone. The Biden administration announced its $3.1 billion plan to develop its domestic electric vehicle battery production, as well as invest in a clean energy future. For more on this, let's welcome David Howell, Acting Director for the Department of Energy Office of Manufacturing and Energy Supply Chains. Thank you for joining us today. So first, help us get familiar with the key aspects of this program and how it will work in practice with some of these companies that participate.

DAVID HOWELL: Thank you. It's great to be here with you. So with this launch of the funding opportunity announcement, supported by the bipartisan infrastructure law, also known as the Infrastructure Investment and Jobs Act, we will be supporting the establishment of key manufacturing plants across the nation for the high capacity battery supply chain, that supply chain that will support electric vehicle battery manufacturing here in the United States and stationary battery manufacturing here in the United States, all the way from processing of extracted materials and refining those materials that are needed for these batteries, like lithium, like cobalt, like nickel, all the way through the supply chain, building out battery materials, production plants, cell production plants, and recycling plants as well.

- David, we've heard from a number of the CEOs here from the large US automakers really pledging the fact that they certainly plan to prioritize electric vehicles over the next several years, over the next coming decades. We heard from GM's CEO Mary Barra. She was on Yahoo Finance earlier today. Let's take a listen to what she had to say.

MARY BARRA: We're seeing really strong demand. I think people are going to continue to see that there's not a huge availability of vehicles. And that is leading to stronger pricing. But we also think there's value there with the new innovation on these vehicles.

- David, she also went on to discuss plans to launch a number of new plants here in the US when it comes to manufacturing batteries. I'm curious if you could share exactly will these plants, I guess, be able to take advantage of the new program that was laid out by you today?

DAVID HOWELL: Yes, they will. So Chairman Barra mentioned the establishment of battery production plants. So these plants will actually be those types of production capabilities that would feed into those plants, making the advanced materials needed for those plants as inputs, and going all the way up to the supply chain of developing the advanced minerals that are needed for these plants. So, yes, these plants that we're focused on establishing will certainly help all of the automakers establish battery production capability here in the United States.

- David, will there be strings attached to that money in terms of how these companies transition away from traditional gas engines to EVs? And RJ Scaringe, who's the CEO of Rivian, recently said 90% to 95% of the supply chain in terms of battery operation, battery making, does not exist for the next 10 years. How far can this go in solving that massive shortcoming?

DAVID HOWELL: So it's very, very important to understand the entire supply chain. Right now you hear a lot about companies that are establishing battery production. That's typically battery cell production. Here in the United States in 2020 we had about 59 gigawatt hours of battery production capabilities. The announced plans will actually accelerate that to almost 340 gigawatt hours of battery production by 2026.

And so we have a really good start through the private sector to establish battery manufacturing capability. What we really need is to build out the rest of the supply chain, those factories that will be supplying key materials to those plants, and also on the other end on the downstream end is to actually develop battery recycling facilities that can recover spent lithium-ion batteries, recover the key materials in those batteries and then put them back into the supply chain.

So that will be very, very important to actually do an end-to-end solution here for the battery supply chain.

RACHELLE AKUFFO: And in terms of the motivation, we did see that Energy Secretary Jennifer Granholm called renewable energy quote "the greatest peace plan this world will ever know." How much has the Russia-Ukraine conflict and perhaps also what we're seeing with the US-China relationship, what has that done to really speed up some of the progress that we're seeing here?

DAVID HOWELL: So in terms of US-Russia, obviously, nickel is a key battery component. So this funding will actually enable the United States to be more independent in terms of material sources. So we will put in place our own capabilities to refine nickel for this battery supply chain. When you really look at China, China has done a really great job for their domestic market to develop exactly what we're doing here, the refining capacity for key materials, moving that down the supply chain to battery materials production, cell production, and in the recycling effort.

So we can do that too here for the United States. And so we do want to capture as much of this market as we can. You're talking about hundreds of billions of dollars a year going into advanced batteries for electric vehicles in the future. So we want to capture as much of the value of that as possible.

- David, talk to us about the climate aspect of this. Is there money being allocated from this program to dispose of the used batteries, and what does that look like?

DAVID HOWELL: There is, and that's a very key part of our entire strategy for the federal government is to establish the battery recycling capabilities here in the United States. Today, lithium ion batteries in the United States are recycled at a rate of less than 5%. We want to push that up to 90%.

This funding will actually help us do that by establishing battery recycling plants here in the United States and recover key materials from those spent batteries, materials like lithium, materials like cobalt, which is scarce, materials like nickel, and put those materials back into the supply chain, and eventually, in the future, to have more of a circular economy for electric vehicles and electric vehicle batteries.

- David, if you can in under 30 seconds, how do you view, in this conversation, Chevron's profit, $6.3 billion in the quarter, four times the prior quarter, Exxon $5.5 billion, more than double the prior quarter, given the context that they've said we're largely going to keep production flat?

DAVID HOWELL: So, you know, you're sort of outside of my expertise there. So one thing that we want to keep in mind is that electrification of the transportation sector is the future. The auto companies have focused on this going forward in making major investments in electrification. And so with that electrification, we do want to capture as much of the benefit as we can, as for our nation, and to move to that circular economy that's low-emitting, low greenhouse gas production, and actually uses domestic fuel electricity to recharge those batteries.

- Thanks so much, David Howell, Acting Director at the Department of Energy Office of Manufacturing and Energy Supply Chains.

Advertisement