To be honest, I can't recall DOE loans but think you have looked into it more. Generally, they give grants for loans require another layer of administration. Think the current overall budget for supply chain is 47 billion but not sure what is in the 10 yr, 3.5 trillion if it passes this week. However the focus will be on pre-battery since there is alread so much private sector investment on EVs and batteries. I'll add that electric post below. They must be super busy scaling... I think they have those offtakes, just waiting to announce them the the right time. The fed is on our side, we need over $5 USD SP to start with on Nasdaq, as then funds and ETFs can buy. So timing. My niggling worry is a setback with the larger furnaces which would be a temporary blip since the smaller ones work fine. "can you smell anything?".
Don't forget Kore:
https://electrek.co/2021/09/24/egeb-two-arizona-companies-partner-to-ramp-up-ev-truck-battery-production/The Electric: 9/5/21
Congress Has Slashed Biden's Vaunted $174 Billion Battery Supply Chain. Now what?
Within weeks of taking office, President Joe Biden set in motion a dramatic goal: From scratch, the U.S. would divorce itself from the singular battery and electric vehicle supply chain built up over a decade by China and establish a separate, American-led EV universe. Joining forces with resource-rich allies like Canada, Brazil and Australia, the U.S. would spend, for starters, $174 billion to stand up everything from mines, to ore processing plants, cell-making factories, and finally recyclers that would recover the metals and start the cycle anew.
But six months later, a far more modest U.S. effort looks likely: With help from people who watch the government, I calculate that congressional negotiators have slashed Biden’s EV and battery agenda to about $47 billion, one-quarter of the funds he requested. That includes just $3 billion to jump-start metals mining and processing companies, the central underlying piece in an EV economy.
Ordinarily, almost anyone in or outside the industry would consider the smaller proposed spending a fortune. Even absent government support, the forecast mid-decade EV boom has already ignited a nascent surge of prospecting by lithium, nickel and other battery metals mining companies within and beyond the U.S.
But few expect to see the full-fledged, decadelong industry bonanza that Biden’s original proposal suggested: If the currently proposed $47 billion in funding holds, the U.S. seems likely to emerge with bolstered EV makers, stimulated by enlarged buyer incentives, but still highly reliant on the Chinese battery supply chain.
“The numbers feel an order of magnitude too low,” said Simon Moores, founder of Benchmark Mineral Intelligence, a London-based battery metals research group.
Given the reduced spending, where should the government invest? The manufacture of battery cells in gigafactories? The complex series of plants through which raw cobalt, nickel, manganese, iron and lithium are processed into electrodes before they get to the cells?
Right now, the former is drawing most private investment—in gigafactories planned by SK Innovation in Georgia, LG Energy Solution and General Motors in Ohio, and Tesla in Texas.
The government needs to step in and jump-start the latter stage, the ground between the mining of ore and the arrival of world-class electrodes at the gigafactory. This is the core of China’s dominance of the global lithium-ion industry—though there are dribs and drabs of battery processing capacity around the world, 80% of it is in China, as I wrote last week.
As far as I know, China has never threatened to cut off anyone’s cathode or anode supply. But there is the unhappy memory of a 2010 flareup between China and Japan in the East China Sea that resulted in a cutoff by Beijing of rare earth metals to much of the world. After almost a half-century of reacting to the whims of OPEC, the global community has a vast apprehension about China becoming a new natural resources hegemon.
China’s battery world
Starting about 2009, China began to erect an EV industry as part of its attempt to compete in the technologies of the future. By the end of 2020, it had lavished more than $100 billion of subsidies and other support on a complex of companies, ranging from battery metal refiners all the way up to EV makers, according to a May report by the Center for Strategic and International Studies, a Washington think tank.
As a result, if you are in the battery business, you almost have to buy some or all of your electrode powders from a Chinese vendor.
Elon Musk runs far and away the world’s most successful EV company, a position he has built on a relationship with Japanese battery maker Panasonic. But even Tesla, the company of which he is CEO, is increasingly turning to Chinese supply: It has been shipping Model 3 sedans with Chinese-made lithium-iron-phosphate batteries to Europe and now is offering the LFP-powered vehicle to the U.S. as well, as Musk confirmed last week. Why? China, which controls its entire value chain, makes first-rate batteries more cheaply than anyone.
Over the last year or two, U.S. and European automakers and their governments have become both extremely nervous about Tesla’s success and encouraged by sudden leaps in battery performance. The industry has become convinced that in the mid-2020s, cheaper batteries are going to finally bring on the age of affordable mass-market EVs.
This coming inflection point—along with heightened tension with China—is the primary factor behind an urgent push in both the U.S. and Europe to build up local battery processing capability. They are acting for competitive reasons: EV batteries are heavy, and if you are an automaker, you don’t want to have to pay to ship them across the world and add substantial cost that rivals with nearby processing capacity don’t carry. But there is also economic security: Covid-19 and the global semiconductor shortage have sensitized governments and companies to their vulnerability to lengthy, far-flung supply chains. Nor, as discussed above, do they want to jump from a reliance on OPEC to a new dependence on a country or countries that dominate the lithium-ion economy.
A waiting processing windfall
That the markets see money to be made in battery supply-chain economics is plain. The share price of Standard Lithium, a Vancouver-based company that mines in Arkansas, is up threefold year to date. Shares of Piedmont Lithium, which mines in North Carolina, have doubled. The price of other underlying battery metals is soaring, too—cobalt is up 58% this year and nickel 30%.
The series of factories that industry would have to build in such an undertaking is colossal: It would require plants capable of turning metal sulfates into cathode precursor, and of baking that at 1,0000 C to produce lithium-ion cathode powder, the stuff that goes into a battery cell. And for the anode, other plants would have to bake petroleum coke at 1,0000 C for two to three weeks, wait and then bake it again at 2,3000 C for weeks longer before infusing it with protective wax.
It is these essential factories for which Congress has decided to ante up just $3 billion.
It’s not that Biden is blind to what’s needed. In a late February executive order, he signaled the U.S.’s intention to take charge of its battery supply chain. Two weeks later, he requested the $174 billion and laid out his ambitious plans.
Neither Biden’s March announcement nor a follow-up “National Blueprint for Lithium Batteries,” produced by the Energy Department, specified how much money would be required to prime a battery processing industry; instead, they suggested that figure would come after a yearlong study. But in April, the federal government’s International Development Finance Corp. got the ball rolling by buying equity in TechMet, a U.K.-based mining company, investing $25 million in a $120 million fundraising round. Founder Brian Menell told me that TechMet would spend the fundraise to develop a Brazilian nickel and cobalt mine.
But Congress slashed away at Biden’s aspirations in months of negotiations over the $1.2 trillion infrastructure bill and the separate $3.5 trillion reconciliation bill, plus side action in committees. In a record kept by Joe Britton, executive director of the Zero Emissions Transportation Association, Biden-proposed money to build 500,000 charging stations was halved to $7.5 billion and combined with programs to dispense propane, hydrogen and seemingly every other kind of transportation fuel not called gasoline or diesel. Consumer rebates for EV purchases dropped by two-thirds to $31.5 billion from the intended $100 billion, although the individual rebates were increased to as much as $12,500 from $7,500. Money to replace school and public transit buses went from $45 billion to $5 billion.
The U.S. currently has only the barest ingredients of a battery processing industry. Regardless of how much—or little—money the government has now allocated to it, David Howell, director of the Energy Department’s Vehicles Technologies Office, suggested in an interview that the very fact that the U.S. was getting behind the creation of such capacity is a very big deal. “It’s sort of a new play,” he said. “Even if you are having to bring in cobalt from foreign sources, you want to be able to refine it here in the U.S.… That would help us to establish that capability and move up the supply chain. The next level up would be the ability to convert the materials into a battery component such as a cathode or an anode. So that’s huge. That’s almost starting from ground zero.”
Missing Billions
Howell’s is a pragmatic and philosophical attitude—when you have nothing, suddenly having something is real and valuable. But, taking the philosophy a bit further, if you have lived through the big tech and societal promises of recent decades, including the 1990s, 2000s and 2010s, you know the rarity of substantial public investment in the U.S.
Europe has gone the opposite direction, with an aggressive approach to spending. The EU has allocated about $30 billion for, among other things, building up a battery industry capable of equipping 6 million EVs every year by 2025. Germany has pivoted much of its industrial base to battery processing and manufacture, invited both Musk and China’s Contemporary Amperex Technology Co. to set up big gigafactories there, and allocated $3 billion to subsidize battery cell production and the construction of 1 million EV charging stations.
It’s terrific for multiple reasons that governments on both sides of the Atlantic are putting themselves behind regional battery supply chains. It will tend to de-risk these new industries and could lead startups and existing companies to pile in too. Menell, the TechMet founder, told me that the proposed spending is “a move in the right direction…even if it is only a fraction of what is ultimately required.”
Yet it’s all thinking far too small and happening far too slowly. The EV race will be won in the 2020s, not the 2030s or beyond. “We don’t need billions of dollars,” Menell said. “We need hundreds of billions of dollars over the next 10 years.”
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