Home Business The production of batteries for electric cars can lead to the return of coal land

The production of batteries for electric cars can lead to the return of coal land

by SuperiorInvest

Electric battery manufacturer SPAR
AR
KZ has announced the location of a factory it will build in West Virginia – a byproduct of the Inflation Reduction Act. The plant will produce storage equipment without cobalt, a raw material mined in the Democratic Republic of Congo and processed in China.

The move is a harbinger of things to come — domestic mining of basic raw materials and building of batteries in the United States. The 482,000-square-foot facility in Bridgeport, WV will initially employ 350 people. The California battery maker said it has an agreement with the United Mine Workers to hire and train idle workers, which could mark a turnaround in coal country.

For starters, the factory will make batteries that go into forklifts and farm equipment and those used for energy storage that uses electrons and releases them later. But over time, the plant will prepare for the expected boom in the electric vehicle market. EVs now make up about 2% of cars worldwide. But Bank of America
BAC
says it could be as high as 25% in 2025 and 50% in 2030 in the US

“SPARKZ is excited to bring its patriotic energy company to West Virginia and begin hiring coalfield families starting today. This is an ideal place to start rebuilding the battery supply chain to end China’s dominance in energy storage,” says CEO Sanjiv Malhotra, Aug 30. “These people are highly trained when it comes to security. Safety is paramount in the mining sector and safety is very important in battery manufacturing.”

The Inflation Reduction Act gives a $7,500 tax credit to buyers of electric vehicles for some cars starting immediately and for others in 2023. But there are catches: first, much of the materials that make up EV batteries—cobalt, lithium, graphite, nickel, and manganese—must be mined in the United States or bought from countries with free trade agreements with this country. These elements must start at 40% and increase by 10% per year to 80% by 2026.

And second, EV batteries must be manufactured or assembled in North America, where such a free trade pact exists. Specifically, half of the assembly must take place in 2023 and reach 100% by 2028.

Are you in trouble?

Bank of America’s global research department worries that battery production won’t keep up with the growth of the EV market – which could spell trouble by 2026. However, the momentum could force the industry to use less cobalt and rely on lithium phosphate instead. However, the bank says meeting the thresholds required by the Inflation Reduction Act will be a challenge. AND Utility Dive the story quoted the institution as saying that US lithium production may be the lowest hurdle.

Historically, llithium-ion technology uses cobalt — an element that is difficult to mine and can lead to “thermal leaks” or fires. But the technology has a greater density and enables the storage of a greater amount of energy. It is used for electric vehicles, grid balancing and mobile phones. However, there are other battery technologies.

There is one solid-state batteries which avoid lithium and use oxides, sulfides, phosphates, and solid polymers. They do not use flammable materials and have a long lifespan – up to 400,000 miles per electric vehicle. But they are more expensive than lithium-ion batteries. Tesla
TSLA
has its eyes on this technology and Toyota wants to bring it to the fore in 2025.

“We should focus searching for non-lithium alternatives on a battery storage solution,” says Eric Dresselhuys, CEO of ESS Inc., in response to questions from this reporter. Due to its reasonable price, safety features and low toxicity, lithium iron batteries are finding markets as a backup power source for utilities and China’s automotive markets. They don’t use nickel which could come from Russia—or Indonesia and the Philippines, which are much friendlier to the United States.

Dresselhuys says the United States will never be able to overtake China and other developing countries that lack strict environmental regulations. Therefore, this country should focus on building better and cheaper battery technologies – not on developing raw materials.

The United States relies on China for cheap labor. Rare earths contain 17 minerals. Separating them is a messy and laborious endeavor. China mines 63% of all such minerals. But it controls 85% of the processing – the step of separating the 17 minerals from the rare earth rock. The United States still produces 38,000 tons, but China processes it.

Rotation Red States Green

The Biden administration wants half of all cars sold in the United States to be electric by 2030. Automakers are gearing up. Tesla, for example, expects to sell 20 million electric cars by 2030. It has lithium-ion battery factories in Nevada and China. It is building one in Germany and one in Austin, Texas, where it will manufacture batteries, battery packs and powertrains.

The company also says it can recover 92% battery materials. Fossil fuels are mined and used once; notes that lithium-ion battery materials are recyclable. Once the raw materials are in the lithium-ion cells, he says, they stay there for the rest of the car’s life. Tesla says recycling is much cheaper than buying raw materials to make new batteries.

Further, Mercedes-Benz works with Envision AESC
SC
to produce electric batteries by 2025. The Mercedes-Benz plant in Tuscaloosa, Alabama has been a production facility for large sport utility vehicles since 1997. The same plant will now produce all-electric vehicles. The automaker says it will invest at least $46 billion in electric car development by 2030.

“The opening of our new battery factory in Alabama is a significant milestone on our journey towards pure electric propulsion,” says Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group AG. “With our comprehensive approach, including a local strategy for sourcing and recycling cells, we emphasize the importance of the USA, where Mercedes-Benz has been successful for decades.

The United States wants to be the world leader in battery production and EV development. The bipartisan infrastructure bill has already earmarked $3.16 billion to support American battery manufacturing, recycling and domestic supply chains. The Inflation Reduction Act builds on this effort.

Sen. Joe Manchin, D-WV, was one of those detained. But the broader bill has many benefits for his constituents. In addition to being the catalyst for at least two businesses coming to the state, West Virginia may also host a regional hydrogen hub that could garner billions of dollars in investment. SPARKZ is just the tip of the iceberg – a potential influx of businesses and jobs.

“Engaging our strong and capable workforce here in West Virginia in domestic battery production is critical to our energy independence and stability,” says Manchin. “The Sparkz facility will create 350 good-paying, long-term jobs and I look forward to seeing this initiative grow. We will continue to work closely to bring battery manufacturing here to the United States so that we do not have to rely on foreign supply chains for our energy needs.”

Ironically, West Virginia voted overwhelmingly for Donald Trump—the man who promised to bring back the coal industry. But market forces prevailed and these companies struggled even more under his watch. In contrast, President Biden has pledged to reinvent hard-hit regions by promoting modern economic development. The Infrastructure Act and the Inflation Reduction Act do this, and coal country illustrates this.

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