Its always hard to know exactly what or why the market thinks...

Its always hard to know exactly what or why the market thinks something but we know from E25 the intention of the $3b Grants (note Grants, not loans) program is to ensure that USA has a viable battery materials processing industry.


The three basic areas of the battery processing are raw materials, precursor mixes and assembly into batteries. You would expect the $3b program will therefore be looking to ensure that America has access to all the materials necessary to make batteries, is establishing a precursor mix industry and is building plants to assemble batteries at scale. That is indeed what the program has been looking to achieve.

As per the Reuters article below, 25 project were selected in the process.
https://www.reuters.com/business/energy/us-award-3-billion-25-projects-battery-manufacturing-sector-2024-09-20/
US to award $3 billion to 25 projects for battery manufacturing sector | Reuters

In addition to $166.1m to E25 this included:

• Albemarle receiving $67m for a project in North Carolina to produce anode material (aka precursor mix)
• Honeywell receiving $126.6m for a facility in Louisiana making a key electrolyte salt needed for lithium batteries
• Dow receiving $100m to produce battery grade carbonate solvents for lithium-ion battery electrolytes
• a $225m award to Standard Lithium and Equinor to produce Lithium Carbonate (via DLE)
• a $225m award to TerraVolta Resources to produce Lithium Carbonate from Brine (via DLE)
• a $166m award to South32 also for a HPMSM plant.

The Reuters article confirms two additional things. The first is that there are negotiations and an environmental review to complete. Given E25 has received an air permit for the proposed HPMSM facility I'd be very surprised if the environmental review encountered problems. The negotiations would appear to be putting T&C's onto the grant, not looking for reasons not to execute the DoE's intentions.

The second critical point is DoE realising that over 96% of HPMSM is made in China. If USA is to develop a non-Chinese based supply chain then it either needs to build batteries that don't involve Manganese or develop a HPMSM industry. One of the major battery styles used in EV's is NMC (Ternary) variants like MNC622 and NMC811. Within LFP there is a desire for higher energy density and one of the emerging developments is LMFP. While the amounts can be relatively small relative to say Nickel, high purity manganese is needed for any of the Ternary battery variants and also for LMFP. The USA needs HPMSM plants built and soon if it is to achieve its goals of developing an independent of China battery ecosystem.

Its a near certainty that the DoE investigated every option available to get HPMSM plants built in the USA. The best they came up with was E25 and South32's proposals and they funded both. While E25 needs this grant, so does the DoE need E25 to successfully implement its plans. The DoE's need is why its surprising that the market appears to be assuming this project won't proceed.