U.S. Now Facing Lithium-Ion Battery Shortage as EV Production Ramps Up

The current semiconductor shortage has severely impacted many American industries, especially the automotive industry. Manufacturers have had to slow down or completely halt production in order to maintain enough semiconductors in reserve. Now, experts think that a new shortage may be on the horizon regarding lithium-ion batteries.

While Tesla has dominated the electric vehicle space in recent years, companies like Ford, General Motors, and several other auto manufacturers have announced their plans to invest heavily into the EV space. However, while these cars could be both cheaper to make and environmentally friendly, they require lithium-ion batteries in order to run properly. The issue is that the U.S. lacks the domestic manufacturing capability to reliably power these new vehicles.

The U.S. only has 4 megafactories which can produce the lithium-ion batteries required for EVs. Meanwhile, China, which has also been accelerating its usage of EVs, has 93. Should this pace continue, then by 2030 the U.S. will only have 10 factories, whereas China will have 140. Being in a situation where the U.S. is dependent on China for lithium-ion batteries presents a serious cost concern for manufacturers, along with national security worries.

The emphasis placed on EVs by President Biden has some hoping that this may push for more investment and development into the domestic lithium-ion battery industry. Still, even if changes are made now, it would still not be enough to prevent a temporary shortage. It would take significant time to purchase land, get environmental permits, construct the facilities, and square away the supply lines. Not to mention the concerns over ensuring that new batteries are up to spec and meet the requirements to be reliable and usable in EVs. This could severely restrict just how aggressive automakers can be when it comes to pushing the new switch to EVs.