Blueprint for Transforming the U.S. Lithium Supply Chain: A Comprehensive Layout from Domestic Mining to Battery Manufacturing
The Biden administration is accelerating the localization of the U.S. lithium-ion battery supply chain, covering the entire process from mining, processing, to manufacturing. Although the U.S. accounts for only 3.6% of global lithium reserves and faces multiple technical and cost barriers, industry observers remain cautiously optimistic about sustainable capacity expansion, supported by funding from the Bipartisan Infrastructure Law and collaborative mechanisms such as Li-Bridge.
Mobile phones, wireless headphones, laptops, electric vehicles, solar energy storage—lithium-ion batteries not only power these everyday devices but have also become a key component in America's alternative energy strategy and its transition away from fossil fuels.
For over a year, the Biden administration has been pushing to strengthen America's domestic lithium-ion battery production capacity. These efforts include funding and resources for domestic lithium mining and end-to-end supply chains, including the processing and manufacturing of electric vehicle batteries.
The goal is to reduce America's dependence on foreign lithium supplies and enhance national energy self-sufficiency. However, to achieve this goal, the United States must significantly expand its domestic lithium manufacturing base.
The National Blueprint for Lithium Batteries 2021-2030, developed by the Federal Consortium for Advanced Batteries (FCAB), outlines plans for the United States to increase investment in the lithium supply chain from mining to processing and production. The blueprint focuses on improving processing industries, procurement, and workforce development, clarifying the Biden administration's path to a more sustainable energy future and the supply and operational support needed to achieve it. But given the United States' currently limited access to global lithium resources, this will be an uphill battle.
Domestic lithium extraction is a 'huge undertaking'
According to data from the U.S. Geological Survey, the only existing lithium producer in the United States is located in Nevada, and the country holds only about 3.6% of global lithium reserves. The dominant force in global lithium production is concentrated in China, which consulting firm Wood Mackenzie estimates accounts for nearly 75% of global lithium-ion battery manufacturing capacity and holds a significant portion of lithium reserves. Other major lithium reserves are located in Australia, Chile, and Argentina.
The strong position of overseas players in this industry means that most of the lithium the United States currently needs must be sourced from abroad.
As other countries shift to alternative energy sources to address the climate crisis, global demand for lithium-ion batteries is also growing. David Howell, Acting Director of the Office of Manufacturing and Energy Supply Chains at the U.S. Department of Energy and Chair of FCAB, stated that as demand rises, the market is expected to reach a scale of $100 billion in the coming decades.
According to the International Energy Agency, this demand largely comes from the booming global electric vehicle market, which saw record sales last year and is expected to set another record in 2022. The Biden administration set a goal last year: by 2030, half of all new vehicles sold in the United States should be zero-emission vehicles.
The government has also introduced consumer financial incentives for automakers that source critical minerals in North America. But domestic supply is far from meeting demand levels.
"Where is the supply? We don't produce electrode materials," said Venkat Srinivasan, Director of the Argonne Collaborative Center for Energy Storage Science and Deputy Director of the Joint Center for Energy Storage Research at Argonne National Laboratory. "We don't produce the materials needed for the rest of the battery. We don't process minerals, we don't even mine them."
Where are the world's lithium reserves distributed?
Charlie Welch, founder and CEO of battery developer ZapBatt, pointed out that while trying to source raw materials like lithium domestically is an excellent idea, it is a huge undertaking. Starting new mining operations is costly and politically risky.
"Even if we flip the switch and announce that the United States is going to do this overnight," he said, there are still many obstacles including costs and environmental challenges. "Extracting specific substances from the ground is not easy."
Nevertheless, automakers still face pressure to produce domestically. The Biden administration is offering a $7,500 tax credit for electric vehicles, provided the battery is primarily made from materials extracted or processed in the United States.
"Every automaker is talking about their fleet being largely electrified by 2030," Srinivasan said.
To accelerate domestic production, the President has announced a series of investments to bolster manufacturing. The government allocated $2.8 billion last week to promote the production of electric vehicle components, such as lithium materials.
To advance more such programs and investments, the government has also created Li-Bridge—a public-private partnership operated by Srinivasan and Argonne National Laboratory, aimed at helping achieve the goals set in the blueprint. Srinivasan said that with Li-Bridge, "the goal is to bridge the gap between battery supply and growing demand."
Li-Bridge aims to bring together industry stakeholders to collaboratively build the lithium supply chain. Srinivasan said the mechanism has been working to align the federal government's vision with private sector actions to understand industry bottlenecks and what measures are needed to meet federal goals.
Building a new supply chain requires innovation-driven approaches
Nevertheless, to solve the capacity problem, innovative breakthroughs are essential. For example, some researchers have already manufactured batteries that use fewer critical minerals, including not only lithium but also cobalt and nickel.
"There are innovative chemistries that don't use cobalt and don't use nickel," Howell said. "Some of them are already on the market. Lithium iron phosphate batteries use lithium but contain no cobalt or nickel."
Srinivasan said research into new designs must proceed in parallel with expanding existing production capacity to ensure continuous improvement. "We have to think about all the pieces at the same time," he noted.
"Where is the supply? We don't produce electrode materials. We don't produce the materials needed for the rest of the battery. We don't process minerals, we don't even mine them."
Venkat Srinivasan
Director of the Argonne Collaborative Center for Energy Storage Science at Argonne National Laboratory
Recycling has also become a potential solution to meet demand. Howell said Biden's blueprint also includes plans to develop stronger recycling capabilities to capture more useful battery minerals.
The goal in the blueprint is to create incentives for companies to achieve a 90% recycling rate for consumer electronics, electric vehicle, and grid storage batteries by 2030.
Nevertheless, since the supply of recycled materials is not expected to meet demand, other companies are researching alternative formulations for their batteries.
"People are often racing to invent brand new batteries, a miracle battery," Welch said.
ZapBatt, founded by Welch, uses lithium titanate technology to produce batteries that charge faster and last longer. He said these batteries, originally developed for military use, can be fully charged in less than 20 minutes and support 15,000 charge cycles.
Can the United States succeed?
In the view of many industry observers, the U.S. government's multi-pronged strategy to build a sophisticated lithium supply chain is a good start, but challenges remain numerous. Srinivasan is encouraged by the many small companies with hundreds of millions of dollars in battery manufacturing capabilities and automakers building new battery plants in the United States. He sees recycling companies gaining capital to begin collecting and recycling cells and batteries.
"Five years ago, I was troubled by this, thinking it was just a bunch of R&D," Srinivasan said. "(I thought) 'How on earth are we going to make an impact in the real world?'"
Nevertheless, Welch said that while recycling and the circular economy are important, they are "not a silver bullet." "We can hardly even recycle Tupperware containers right now."
He said more effort should be put into ensuring batteries have a long lifespan in the first place. Given the significant energy invested in mining and obtaining scarce minerals, emphasizing longer battery life would encourage producers to use available materials efficiently, moving away from a "fast fashion battery economy."
But as companies of all sizes race to find solutions, more stakeholders are cautiously optimistic that mineral production can scale sustainably.
"I'm very excited. I'm more hopeful," Srinivasan said. "I've never seen a moment like this."
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