China is the world’s leading producer of lithium-ion cells, controlling much of the global mining and on minerals processing, a key step in the electric vehicle industry.
Under the terms of the grants scheme, successful applicants will have to match their grant with their own funds.
Novonix said it will put the grant towards the construction of a 30,000-tonne-a year US manufacturing facility if it is successful.
The US hopes boosting local battery materials production will ease concerns about China controlling much of the market, while increased supplies will aid efforts to reduce the price of key commodities.
Prices of battery minerals like nickel, lithium and cobalt have surged this year in the face of swelling global EV demand, supply chain disruptions and Russia’s invasion of Ukraine, which sent nickel prices soaring.
The increased prices have underpinned global inflation and countered efforts to increase EV uptake, growth in which has slowed due to costs and lengthy production delays.
Australia is also pushing hard to increase production. Earlier this year, the former coalition government announced nearly $500 million of funding to boost output of critical minerals, aiming to diversify supply for its allies and counter China’s dominance of the global market.
Read More: Novonix shares jump as US Department of Energy mulls battery materials grant