In this post, I’m diving into how the DOE Loan Programs Office (LPO) is supporting U.S. critical minerals projects in line with the Biden Administration’s clean energy goals. We’ve reached the point when it’s time to scale the mountain and reach our deployment and decarbonization goals. America can and will do big things.
The Biden Administration has set an ambitious goal of 50% electric vehicle sales by 2030, and the private sector is starting to respond. DOE is tracking almost 1,000 GWh of announced battery gigafactory capacity planned for this decade, many of which were announced over the last 24 months. We’re going to need a massive scale-up of our critical minerals supply chain to keep pace with these deployment goals. To meet the minerals demand from the announced battery gigafactories we could need a more than ten-fold increase in the supply of key minerals like graphite, cobalt, nickel, and lithium. This scale-up will require significant investment to build up domestic production capacity.
Though the United States has significant accessible deposits of many critical minerals, today we account for negligible shares of extraction and processing. In 2021, China accounted for ~35-100% of global processing across graphite, cobalt, nickel, and lithium, including ~100% of processing for graphite.
In the last few months, LPO has made four announcements connected to the ATVM program – loans closed with Ultium Cells and Syrah Vidalia, and conditional commitments to Rhyolite Ridge and Redwood Materials.
If you’re new to LPO, ATVM refers to the Advanced Technology Vehicles Manufacturing Loan Program. This program provides loans to onshore and scale-up the manufacturing of eligible vehicles and qualifying components. The ATVM projects in our pipeline include manufacturing facilities for vehicles, batteries, battery precursor materials, other key vehicle components, and the processing of critical minerals. The Bipartisan Infrastructure Law expanded the definition of “advanced technology vehicle” to include medium- and heavy-duty vehicles, locomotives, maritime vessels including offshore wind vessels, and aviation. With additional appropriated funding through the Inflation Reduction Act, LPO has around $55 billion in estimated loan authority for the ATVM Loan Program.
LPO supports projects that are led by the private sector, which means we provide senior debt financing to projects developed by the private sector. LPO evaluates applications to determine whether they are eligible for financing under the ATVM program and offers a pre-application consultation process to potential applicants to discuss their proposed project. The office conducts rigorous due diligence, and we ensure that projects meet financial, technical, and environmental requirements, as well as a “reasonable prospect of repayment,” before providing a loan.
If we want to reach our decarbonization goals, we need to electrify transportation at mass scale and as fast as possible, while ensuring stable supply chains for batteries and the critical minerals that power them. LPO is getting us closer to that goal by implementing appropriated funding toward projects that are reshoring and onshoring electric vehicle and critical minerals supply chains.
Critical Minerals Processing – Syrah Vidalia
For lithium, graphite, and other critical minerals, we must reduce our dependence on adverse foreign governments and prevent vulnerability to natural disasters and other supply disruptions. Our national security, economy, and the growth of the EV market require a consistent supply of critical materials.
In July 2022, DOE issued a $102.1 million loan to Syrah Technologies LLC for the expansion of its Syrah Vidalia Facility—a processing facility that produces graphite-based active anode material (AAM), a critical material used in lithium-ion batteries for electric vehicles and other clean energy technologies. This loan marked the first loan to an ATVM project since 2011 and the first ATVM loan exclusively for a supply chain manufacturing project.
Located in Vidalia, LA, the facility would be the first of its kind in the country, bringing a key industry to the United States to support the growing EV sector. With the expanded production capacity enabled by the DOE loan, the facility is expected to produce enough natural graphite-based AAM to support approximately 2.5 million EVs by 2040, thus saving an estimated 970 million gallons of gasoline annually.
Critical Minerals Processing – Rhyolite Ridge
In January, LPO offered a conditional commitment to lend up to $700 million to the Rhyolite Ridge Lithium-Boron Project in Esmeralda County, Nevada to develop a domestic supply of lithium carbonate for EV batteries.
When at full production capacity, Rhyolite Ridge is expected to annually produce enough lithium carbonate for approximately 370,000 EVs batteries, saving 145 million gallons of gasoline each year.
Critical Materials Recycling – Redwood Materials
In order to meet the needs of the rapidly growing EV market, the United States will need to expand battery recycling capabilities, as well as grow our domestic capacity for producing battery precursor materials. By lowering the cost of the critical materials for lithium-ion batteries using recycled materials, electric vehicles can become more accessible to lower income communities.
This week, LPO announced a $2 billion conditional commitment to Redwood Materials for the construction and expansion of its Nevada battery materials campus that, when fully operational, will produce anode copper foil and cathode active materials in a fully closed-loop lithium-ion battery manufacturing process by recycling end-of-life battery and production scrap and remanufacturing that feedstock into critical materials.
Redwood was founded in 2017 and has been testing and validating its approach for over 5 years. They broke ground on their copper foil project in 2022 and have a pilot line up and running.
At full production capacity, the project’s anode copper foil and cathode active material output is anticipated to support the production of more than 1 million EVs per year, reducing annual gasoline consumption by over 395 million gallons and avoiding more than 3.5 million tons of CO2 emissions annually.
Battery Cell Manufacturing – Ultium Cells
Electrifying more vehicles means manufacturing battery cells at mass scale and establishing a domestic supply chain to meet growing EV demand. A domestic supply chain also creates jobs and revitalizes communities.
In December 2022, DOE announced the closing of a $2.5 billion loan to Ultium Cells LLC to help finance the construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee, and Michigan. Ultium Cells, a joint venture between General Motors and LG Energy Solutions, will manage battery cell production at the three facilities, as a critical move to address the growing demand for EVs. DOE estimates the battery cells manufactured by these facilities could reduce gasoline use by 480 million gallons per year.
These ATVM projects are examples of how we can ramp up domestic production of electric vehicles at scale and bring electric vehicle manufacturing supply chains to this country. From processing lithium mined in the United States, to manufacturing battery cells, and then recycling end-of-life batteries and production scrap, LPO is financing a strong domestic supply chain and contributing to energy independence.
If you want to learn more about how LPO has supported advanced technology vehicle manufacturing, visit the ATVM portfolio page.