Why Current Government Funding for Battery Technology Is Not Enough

Contributed Commentary by Mukesh Chatter, Alsym Energy  

April 18, 2023 | If policy is any indication, the United States is set on becoming a leader of the global decarbonization movement. Ambitious goals like a 100% clean electrical grid by 2035 or having electric vehicles make up 50% of all car sales by 2030 demonstrate the Biden administration’s commitment to combating climate change by moving away from fossil fuels. But this increased demand for clean energy creates a need for innovative battery technology to store this energy efficiently.  

In January, the Department of Energy (DOE) released a Funding Opportunity Announcement for the development of new battery technologies. Investing $125 million over four years, The Energy Innovation Hub Program: Research to Enable Next-Generation Batteries and Energy Storage will award three winners a year with up to $15 million for “basic scientific research” into electrochemical energy storage. 

This represents a promising step up from previous energy storage initiatives, which have allotted funds mostly to battery companies ready to build manufacturing facilities. The Infrastructure Investment and Jobs Act of 2021 (IIJA), for instance, includes a substantial $6 billion for the establishment of a domestic battery supply chain but stipulates that funding will go to advanced projects with demonstrated applications across sectors. 

While the new research-focused funding opportunity is an admirable and necessary effort by the DOE to advance decarbonization, the grant language emphasizes applicants should focus on “fundamental scientific concepts and understanding for the next generation of batteries,” not necessarily the development of commercial alternatives to technologies like lithium-ion (Li-ion). 

The U.S. battery industry needs to find a safe, affordable, and readily sourced alternative to Li-ion technology sooner rather than later. Li-ion battery production uses a narrow set of raw materials controlled by a handful of countries, many of whose geopolitical policies are at odds with the United States. China, for examples, controls an overwhelming majority of the components manufacturing process. Li-ion battery pack prices are already on the rise due to supply chain costs, and they’re likely to keep increasing as geopolitical volatility and demand for batteries continue to increase.  

Adopting alternative battery technologies would allow the United States to circumvent the increasing instability of Li-ion battery production and drive innovation on the way to achieving its climate goals. Many private-sector startups and small innovators are already searching for solutions—the government should encourage and support these companies as much as possible. 

But by emphasizing basic universal research in its grant solicitation, the Energy Innovation Hub Program limits the ability of many companies to apply for the grant, especially startups developing proprietary technology for commercial viability rather than scientific exploration. Because startups cannot reveal the science behind their batteries without compromising their intellectual property and commercial interests, they are effectively unable to pursue funding and deprioritized in the clean-energy movement. 

Such exclusion undervalues the potential contributions of commercial battery developers in the clean-energy movement. Startups are often the source of groundbreaking technology because their survival depends on successful innovations. These companies are worth investing in, but the DOE needs to provide avenues for startups to apply for government funding without risking their proprietary and novel technologies. 

Battery startups need more government support if the U.S. wishes to achieve the Biden administration’s goal of a 100% clean electrical grid by 2035. It takes billions of dollars to build a single battery factory, let alone maintain its operations — the $15 million award from the Energy Innovation Hub Program only covers a tiny fraction of these costs. Awards in the millions are helpful, but additional funding would greatly accelerate the establishment of a robust domestic battery industry.  

Research and development is one of the most time-consuming and crucial elements of battery innovation, especially for overcoming the challenges of scaling up for production. If government grants require new technologies to be market-ready before they are eligible for funding, some of the most promising battery chemistries currently being developed may never advance beyond the research stage. Just as Li-ion manufacturers have refined their processes over time, investing in research and development of non-lithium alternatives will pay dividends long-term.  

Congress recognizes the need to comprehensively fund new battery technologies. In an open letter to Department of Energy Secretary Jennifer Granholm, Senator Joe Manchin and bipartisan colleagues point out how so far, funds allotted in IIJA for the development of a domestic battery industry have gone exclusively to Li-ion projects. The Senators argue that the Biden administration must accelerate the deployment of domestic alternative battery manufacturing.  

The United States is taking significant steps in the global clean-energy movement, with ambitious climate goals and funding initiatives for the next generation of grid-scale batteries. However, funding bodies must strike a balance between scientific research and commercial viability when creating opportunities. The Energy Innovation Hub Program is a promising sign of government support, but the Department of Energy must provide more avenues for private-sector innovators to apply for federal funding. Congress and the Biden administration must continue to prioritize the comprehensive funding of new battery technologies so the U.S. can cement its position as a leader in the push for a cleaner, greener, and more sustainable future.  

Mukesh Chatter is the CEO of Alsym Energy, a technology company developing a low-cost, high-performance rechargeable battery chemistry that is free of lithium and cobalt. He can be reached at mukesh.chatter@alsym.com.