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EV battery spending spree thwarts Michigan, supports 'Battery Belt'

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Washington — The U.S. Department of Energy announced Wednesday that it has secured $2.8 billion in funding for electric vehicle battery production in 12 states. None of the projects, most focused on battery mineral processing or component manufacturing, are in Michigan, the largest automated manufacturing state in the country.

When asked why, DOE officials, speaking on condition of anonymity, said it was twofold: There was a rush to invest in battery cell production after the Inflation Reduction Act was enacted, which reduced the need for federal funding for this phase. .

Second, the agency wanted to select projects that were located near the raw material supply or near its customers. Michigan’s Upper Peninsula is home to the only nickel mine in the US, a key component of EV batteries.

But that doesn’t mean Michigan won’t benefit from cash flow: Experts are targeting part of the EV battery supply chain that is currently particularly weak in the US, and strengthening those links will help Michigan-based companies. Coming back to EVs.

Sam Abuelsamid, principal research analyst at Guidehouse Insights, said there has been rapid growth in battery cell and battery pack assembly facilities over the past three years, including in Michigan.

“But you have to have all these other components to produce these cells,” he said. “We are now starting to see the rest of this local supply chain fill up and this will help make the overall industry more resilient to future shocks.”

DOE officials said there will be multiple rounds of funding, and Michigan projects may receive funding in the future, depending on “what part of the supply chain we’re solving.” The $2.8 billion funding is the first battery investment under the Bilateral Infrastructure Act, which went into effect last year. The law has allocated more than $7 billion for critical materials and components for electric vehicle batteries.

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