Dive Brief:

• President Joe Biden's administration is aggressively pursuing transportation electrification not just because of its potential to curb greenhouse gas emissions and address climate change, but also to prevent China from cornering a bourgeoning $23 trillion market in carbon-reducing technologies, Secretary of Energy Jennifer Granholm said Tuesday.
• The U.S. Department of Energy plans to "double down" on research and development through its loan programs office, in order to make electric vehicles (EVs) easier to produce and deploy, Granholm said at a virtual event hosted by Securing America's Future Energy (SAFE).
• "DOE is going to invest billions of dollars over the next few years in the technologies that are going to make the EV future a reality," Granholm said. "To reduce costs, and reliance on China."

Dive Insight:

China has largely cornered the battery manufacturing market, Granholm said, making DOE's commitment to EVs as much about economic growth and national security as it is about cleaner air.

SAFE has estimated China controls nearly 70% of global EV battery manufacturing capacity, and North America has less than 10%. The group advocates for emissions-free transportation policies, and has published research showing the United States could create 647,000 jobs within the next five years by aggressively growing the EV market and securing the electric transportation supply chain.

According to SAFE, 142 lithium-ion battery megafactories were under construction worldwide as of 2020; 107 were located in China — with just nine in the United States.

"This could be a big problem. Because the auto and truck manufacturing sectors in the United States have been the key to our industrial base," SAFE CEO Robbie Diamond said during the webinar.

"Governments have to get in the game — at least the United States does, or we will be run over," Granholm said. She called for the country to grow critical mining and processing capabilities, increase battery production, and scale up EV and related transportation technology manufacturing.

All of those strategies will necessary to reach a net-zero carbon economy by 2050, with a zero-carbon electricity sector by 2035, as Biden has called for, said Granholm. "There is a huge sense of urgency in getting these solutions out the door," she said.

Granholm talked about SAFE's report on clean transportation job opportunities, saying it confirms that "solutions to the climate crisis can create massive job opportunities for economy and American people."

SAFE's report highlights the potential for more than 270,000 jobs "through investment in transportation manufacturing grants and tax incentives" and nearly 154,000 jobs through "incentives that make it cheaper to buy medium- and heavy-duty electric vehicles, like trucks and buses."

On the topic of buses, Diamond said there are about 400,000 electric buses in China right now and only 1,000 in the United States. "Think about the amount of materials in the supply chain" necessary to construct those buses, he said. 

SAFE said its report concludes about 28,000 jobs could be created by developing a critical minerals supply chain and refining sector "that is not controlled by China."

The DOE's loan programs office is "open for business" and ready to "put together a portfolio of investments in all kinds of clean energy solutions," Granholm said.

DOE's sustainable transportation strategy also includes hydrogen, fuel cells and biofuel cells, she said, but "electrification is key."

DOE, working with private sector partners, has helped reduce battery costs 85% over the past two decades, said Granholm, with a goal of reaching $80/kWh for EV batteries. That price point "will make EVs cost competitive with the upfront pricing of internal combustion engine vehicles," she said. DOE is also working on technology to reduce charge times, so fast chargers may be capable of adding 300 miles of range to a vehicle in 15 minutes. 

The upfront pricing comparison is a "critical" third piece for EV adoption to take hold, Granholm added. EV owners already save an average of $600 annually on fuel, and EVs cost on average $6,000 less to maintain over their lifespan due to having fewer parts, she said.

"Beyond costs, we need to make EVs more accessible," Granholm said. That means easier to find chargers, and more models for sale in car dealerships. She said there are now more than 100 EV models expected to be for sale in the United States in the next two to three years.

Granholm said DOE and the White House are focused on the scale of the economic activity represented by the transition to clean transportation. Products that reduce carbon emissions, including batteries, are globally expected to create a $23 trillion market over the next decade, she said.

"The question is, where are those investments going to be? Are they going to be in China?"