The US Department of Energy recently shared that through 2020, most battery cells and packs used in US plug-in vehicles were produced in the United States. That’s great news for the USA, not surprising once you think about it for a moment, and also not even close to the full story. Let’s go through those points one by one, but let’s start with the cool chart from Argonne National Laboratory.
In simple text, “Since 2018, 70% of battery cell capacity and 87% of battery pack capacity produced for US. PEVs came from the United States.”
Considering that the EV battery industry is dominated by foreign companies — Korea’s LG Energy Solution and Samsung SDI, China’s CATL, and Japan’s Panasonic — this is great news for those who care about the US economy. The hearts of electric vehicles on roads across the United States were produced here on US soil.
However, the reason this is not surprising once you spend a moment thinking about it, is that about 70% to 80% of US EV sales have been Teslas, and most of Tesla’s vehicle batteries (especially for vehicles produced in the US for the US market) are produced at Tesla’s first gigafactory, which is located in Nevada. All of a sudden, the 70–87% figure seems like common sense.
Tesla’s close partner Panasonic produces the cells at Gigafactory 1 (and as the bar chart shows well, also produces a chunk of them in Japan), whereas Tesla itself produces the packs there.
Otherwise, on the cell side, the only notable chunks of capacity are produced at LG Energy Solution’s giant battery factory in Wrocław, Poland, and in Korea.
We also now have factories under construction in the US by GM and LG Energy Solution (Ohio) and SK Innovation (Georgia). So, more battery cell and pack production capacity is coming.
However, this doesn’t tell the full story at all. Almost none of the raw minerals that go into the batteries come from the US, and almost none of the mineral processing happens here. There’s tremendous potential to both boost the US economy and cut emissions by sourcing more of the minerals (nickel and lithium, most notably) from the United States. Rather than having lithium extracted from halfway across the Earth (Australia) and process in China, we could be getting a lot more lithium from North Carolina, Nevada, and elsewhere within our borders and we could be processing it nearby. That would cut an enormous amount of shipping emissions. Similarly, instead of getting most of the raw and processed nickel from that region, we could be getting it from the US and Canada.
I plan to interview Howard Klein and Rodney Hooper of RK Equity about these matters again soon. If you have any questions for them, let me know. In the meantime, check out some of our previous discussions from 2020 and early 2021 here: