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Thursday, February 9, 2023

Most EVs for US sale have American-made batteries

Given the push by the Biden administration to shore up a local supply chain and enable more American manufacturing for electric vehicles, it may come as a bit of a surprise that the vast majority of EV battery packs and cells are already made in the U.S.

According to a recent update from the U.S. Department of Energy Vehicle Technologies Office, nearly 70% of cell capacity and more than 87% of battery packs produced for U.S. market light-duty plug-in electric vehicles (battery electric and plug-in hybrid combined) were made in the U.S. 

U.S. annual battery production – Department of Energy

With data provided by a 2021 paper from researchers at the Argonne National Laboratory, the DOE update underscores the effect of one automaker in particular: Tesla. 

In 2017, U.S.-produced cells were third place behind those made in Japan and South Korea. But a year later, with the ramp of 2170 cells at Tesla’s Nevada Gigafactory for the Tesla Model 3, that trendline changed; in 2018, U.S. plants produced more than double the cell capacity than second-place Japan. 

Tesla Motors gigafactory - size comparisons [source: EV Obsession]

Tesla Motors gigafactory – size comparisons [source: EV Obsession]

The story is different when looking at packs, because Tesla had assembled its packs in the U.S. all along. Nissan had also assembled its packs for the Leaf in the U.S. starting in 2013, and GM brought cell production for the Chevrolet Bolt EV to the U.S. in 2019. 

With recent announcements, the proportion of U.S.-made batteries is expected to continue to grow. GM in June announced plans for two additional U.S. battery factories, as part of its Ultium Cells joint venture with LG, and a joint venture between Ford and SK innovation will supply cells for the F-150 Lightning and other upcoming EVs from the automaker. 

Ford Battery Benchmarking and Test Laboratory in Allen Park, Michigan

Ford Battery Benchmarking and Test Laboratory in Allen Park, Michigan

As a result of a 100-day review initiated in February and completed in June, the Biden administration announced a new policy that DOE grants, agreements, and R&D contracts will be required to manufacture the products developed in the U.S. It also considered ways to help the DOE’s Advanced Technology Vehicles Manufacturing Loan Program (ATVM) program enable battery cell making in the U.S. 

With additional EV policy support from Congress stoking sales, plus these manufacturing commitments, it’s quite likely that securing the supply chain will be an even more important factor in these trend lines as the decade progresses. 

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