More than half a billion dollars of federal government funds...

More than half a billion dollars of federal government funds have been set aside to encourage production of batteries in Australia, but exactly how the scheme will work has not yet been figured out.

A new National Battery Strategy has been released, aiming to make the country a globally competitive battery maker for domestic use and as an export opportunity.

It is part of the government's Future Made in Australia policy, which aims to grasp the economic opportunities of the global transition to net zero emissions, as well as ensuring China does not control the supply chain.

The centrepiece of the strategy is $532 million in financial incentives for the production of batteries. Announced in the budget earlier this month, the funding would be spread over seven years and administered by the Australian Renewable Energy Agency (ARENA).

But the scheme, dubbed "Battery Breakthrough", has not yet been formulated, despite funding due to commence in the coming financial year.

"The government will work closely with industry and other stakeholders to design, develop and deliver the Battery Breakthrough," the strategy reads.

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The National Battery Strategy focuses on areas the federal government sees Australia having a competitive advantage, including turning raw minerals into substances used in the global electric vehicle supply chain.