The U.S. Department of Energy has awarded $500 million in grants to domestic battery and critical-mineral projects, with much of the funding going to startups. The program is intended to reduce dependence on foreign suppliers and strengthen U.S. access to battery materials used across defense, transportation, and energy applications.
The Energy Department said the funding will support projects across the battery supply chain, including lithium processing, battery recycling, and advanced anode materials.
Battery Startups Are Finding More Demand From Defense
The funding comes as U.S. battery startups increasingly look to defense applications following reductions in federal incentives for electric vehicles and battery production.
Batteries are used across a wide range of military equipment, including drones, torpedoes, radios, autonomous systems, and fighter aircraft. Defense demand is becoming a larger part of discussions with battery suppliers even as automotive demand remains significantly larger.
Coreshell received a $50 million award to expand production of its metallurgical silicon anode material. The company has also added ADS Ventures as an investor, whose parent company supplies the defense sector.
A Coreshell spokesperson said defense applications for lithium-ion batteries are increasingly coming up in commercial discussions.
Lithium and Recycling Projects Receive $100 Million Awards
Lilac Solutions received $100 million to build a lithium processing facility at Utah’s Great Salt Lake. The company plans to produce 5,000 metric tons of lithium carbonate annually by 2028.
Lithium carbonate is an important precursor used in battery manufacturing.
Nth Cycle also received $100 million for a facility that will process black mass recovered from used lithium-ion batteries. The plant is expected to produce lithium and nickel compounds that can be reused in new batteries.
Nth Cycle CEO Megan O’Connor said the company is seeing clear demand from defense customers while automotive demand remains important.
Automotive Battery Spending Still Far Exceeds Defense
Defense battery spending is difficult to quantify precisely, but the U.S. Defense Logistics Agency was purchasing about $200 million worth of batteries annually as of 2021.
By comparison, the U.S. automotive industry is expected to spend nearly $18 billion on battery manufacturing this year, according to Mordor Intelligence.
Automakers are still introducing new electric vehicles and planning for longer-term growth, although demand expectations have shifted after policy changes reduced some federal support.
The latest DOE grants give domestic battery companies another source of funding as they pursue markets beyond passenger EVs, particularly applications where the U.S. government wants more locally sourced materials and components.
Featured image credits: Wikimedia Commons
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