Workers marry the body structure with the battery pack and the front and rear sub frames as they assemble electric vehicles at the Lucid Motors plant in Casa Grande, Arizona, September 28, 2021.

Caitlin O’Hara | Reuters

President Joe Biden announced $2.8 billion in grants for 20 companies to produce batteries for electric vehicles in the United States.

The grants are being allocated through the Department of Energy with funds from the Bipartisan Infrastructure Law to companies in 12 states. The funding will go toward the creation of battery-grade materials including lithium, graphite and nickel.

Increasing manufacturing capacity of in the United States has been a priority for the Biden administration. In all, the Bipartisan Infrastructure Law, the CHIPS and Science Act and the Inflation Reduction Act allocated more than $135 billion toward electric vehicle manufacturing. The president has directed the industry to have EVs comprise half of all new vehicles produced in the United States by 2030.

“The Infrastructure Law also invests in people and companies that are going to build our future like electric vehicles and the advanced batteries that are going to power those vehicles,” Biden said. “This is critically important because the future of vehicles is electric, but the battery is a key part of that electric vehicle and right now 75% of that battery manufacturing is done in China.”

Competing with China is a central incentive for the push. China controls nearly half of global production for some of the materials needed to produce these batteries, Biden said.

“China’s battery technology is not more innovative than anyone else’s,” Biden said. “In fact, our national labs, our research universities, our automakers led the development of this technology here in America, but by undercutting US manufacturers with their unfair subsidies and trade practices, China seized a significant part of the market.”

Biden said the United States is experiencing “one of the most significant economic transitions since the Industrial Revolution.”

In addition to the grants, Biden announced the creation of a new American Battery Manufacturing Initiative which will allow for a full government approach to produce batteries for uses ranging from electric vehicles and homes to defense purposes, the White House says. The move will continue the push to increase American competitiveness by creating more batteries and critical battery components in the U.S.