US Allocates $1.3 Bn To Boost Lithium-ion Domestic Manufacturing

US Allocates $1.3 Bn To Boost Lithium-ion Domestic Manufacturing

To meet the growing domestic demand for electric vehicles (EVs), the United States (US) government has allocated a loan to finance a new facility in Terre Haute, Indiana, for manufacturing of lithium-ion battery separators. The government recently allocated a $1.3 billion direct loan ($1.2 billion in principal and $139.3 million in capitalized interest) to ENTEK Lithium Separators LLC (ENTEK). This loan aims to fund the construction of the Terre Haute facility and bolster the production of lithium-ion battery separators.

Domestic EV manufacturing has in the US has surged in response to the massive growth in domestic and global EV markets, supported by financial incentives under President Biden’s Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law. ENTEK aims to become the United States’ first end-to-end domestic supplier of “wet process” battery separators for the North American lithium-ion EV battery market.

A boost to local EV market 

The separators will be primarily used in EVs, strengthening the US lithium-ion battery cell supply chain and enabling the production of batteries for advanced technology vehicles. This project supports the nation’s goal of expanding secure, reliable, and environmentally sustainable clean energy domestic supply chains, which are critical for meeting the country’s ambitious climate objectives and reducing reliance on economic competitors like China.

The loan is provided through the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, which supports U.S. manufacturing of advanced technology vehicles, qualifying components, and materials that improve fuel economy. Through several recent ATVM projects, the Loan Programs Office (LPO) is helping advance the Biden-Harris Administration’s EV adoption goals.

A battery separator is a membrane placed between the anode and cathode terminals of a battery. Its primary function is to prevent electronic conduction (short circuits or direct contact) between the anode and cathode terminals while allowing the conduction of the ions through the electrolyte. Separators play an essential role in the performance and safety of lithium-ion batteries.

Demand for battery separators to surge 

The Department of Energy (DOE) estimates that by 2030, the North American lithium-ion EV battery industry will require annual separator production of 7 to 10 billion square meters. Once completed, the ENTEK facility is expected to manufacture 1.72 billion square meters of separator material annually for the North American EV market. Each GWh of cell manufacturing requires 7-10 million square meters of battery separator material, depending on the battery form factor (cylindrical, pouch, or prismatic). Based on the LPO technical team’s analysis, using current form factors selected by cell manufacturers, this project will support roughly 1.9 million mid-size EVs or 1.3 million eSUVs.

The project will significantly contribute to the growth of domestic battery separator capacity and help U.S. EV manufacturers meet battery component sourcing requirements under the 30D Clean Vehicle Credit. ENTEK will be able to customize battery separators to accommodate various EV battery designs. The separators produced will support all existing lithium-ion EV battery chemistries, including NMC, NCA, LMFP, and LFP. Additionally, ENTEK will sell separators to manufacturers of lithium-ion batteries for energy storage applications.