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  • Writer's pictureMoshiel Biton

4 Things You Need to Know About the US EV Market

Over the last few years, the US EV battery market has grown rapidly. With increased EV demand and a general sentiment of needing a more sustainable alternative to traditional internal combustion engine personal transport methods, several trends are shaping the development of the US EV market. As a result, the US EV battery market is expected to continue to grow in the coming years, as it’s driven by an ever-increasing demand, government support, grants, supply chain changes and sustainability missions.


Increasing Demand for EVs

With concerns about climate change, air pollution, and the desire for increased fuel efficiency, the demand for EVs in the US is constantly rising. Indeed, while EVs made up 1% of the market share in 2016, by 2022, EVs accounted for 5.8% of all new cars sold in the US. Furthermore, even though fewer cars were bought in 2022 in the US compared to the year before, more of these vehicles were electric and the number of EVs went up by a strong 65%, representing an increase of almost two thirds compared to the previous year. Additionally, it’s projected that the number of EVs sold in the US will be over 1 million in 2023 and the US EV market is expected to grow from $28.24 billion in 2021 to $137.43 billion in 2028 at a CAGR of 25.4%. Consequently, as more consumers opt for EVs, the demand for batteries to power these vehicles is also increasing and the technology must be optimal.

Advanced Battery Technology

Similarly, battery technology is rapidly advancing as it tries to keep up with the rising demand. This is leading to the development of more efficient and affordable batteries. While lithium-ion batteries are still currently the dominant technology in the market, new technologies such as solid-state batteries and lithium-sulfur batteries are also emerging. In the US, major automakers including Ford and General Motors are heavily investing in research and development of EV batteries to gain a competitive edge in the market. As they both recognize the importance of battery technology to the success of their EVs, their investments in advanced battery technology range from opening new facilities to partnering with battery makers.


Through its subsidiary, Ford Ion Park, Ford has been investing in the development of its own battery technology. Ford Ion Park is focused on research and development of lithium-ion and solid-state batteries, and is working to improve the performance, durability, and cost-effectiveness of these batteries. Moreover, Ford has partnered with battery manufacturer, SK Innovation, to secure a reliable supply of batteries for its EVs as the race to produce more of them for the growing US market heats up. Additionally, the American car maker will invest $29 billion in electric and autonomous vehicles through 2025, more than double the $11.5 billion it promised through 2022.

General Motors

GM has also made significant investments in battery technology through its subsidiary, Wallace Battery Cell Innovation Center. Indeed, the facility builds on over $5 billion already invested in batteries in the US, expanding design capabilities of future battery chemistries and increasing future EV range. Furthermore, focused on research and development of advanced batteries, the OEM has also been working on developing its own battery technology, including its Ultium battery system, which it plans to use in its upcoming EVs. Indeed, GM has been working to increase its battery production capacity by investing in new battery factories in partnership with LG Chem. Indeed, the American car maker plans to spend $2.1 billion with the South Korean energy company to build a US EV battery plant.

Government Efforts and Grants

To encourage EV adoption, the US government is making many investments and plans to create a more EV-friendly environment and infrastructure. Indeed, government support has been critical to the growth of the US EV battery market: with high entry prices and an initial low adoption, it has helped to make EVs more affordable and practical for consumers. As a result, it is providing funding for research and development, new infrastructure, and incentives and subsidies to consumers, including tax credits.

R&D Funding

To support the growth of the EV market, the US government is providing funding for research and development of battery technology. Indeed, the Department of Energy's Office of Energy Efficiency and Renewable Energy has made over $3 billion available for research on advanced battery materials, manufacturing processes, and recycling. This will be split into two programs designed to increase domestic production of advanced EV batteries and energy storage. The first will see approximately $2.8 billion spent to support new, retrofitted and expanded domestic operations for the production of battery materials and cell components, and battery recycling. While the other will see $60 million go towards research and development of second-life sources for EV batteries.

New Infrastructure

In addition to R&D funding, the US government is also investing in the development of charging infrastructure for EVs. This includes funding for the installation of charging stations and grants to support research on wireless charging technology. Indeed, Congress approved almost $5 billion of grants over five years for states to build thousands of EV charging stations. Moreover, the White House recently approved the first $900 million in US funding to build EV charging stations in 35 states across approximately 53,000 miles of highway across the country as part of a $1 trillion infrastructure law approved in November.

Consumer Grants

As EVs tend to have a higher entry price, the US government is offering a federal tax credit of up to $7,500 for the purchase of new EVs to help reduce the upfront cost for consumers. The scheme, the Inflation Reduction Act (IRA), also establishes an unprecedented credit for used EVs, which is subject to a few requirements. Indeed, the used EV tax credit is for the lowest between $4,000 or up to 30% of the vehicle price. Additionally, many states offer further incentives to encourage EV adoption. This includes rebates, tax credits, and access to HOV lanes. Indeed, California offers a rebate of up to $2,000 for the purchase of a new EV.

Local Supply Chain Improvements

While the US continues to grow its EV market, it is also focused on reducing its dependence on foreign imports and supporting domestic production. Indeed, the production of batteries in the US is an important trend in the growth of the EV battery market. Consequently, several companies, both local and international, are investing in the production of batteries on US soil, moving away from a more China-based assembly line. This includes EV and battery manufacturers such as Tesla, LG Chem, and Panasonic.

Tesla's Gigafactories

In 2016, Tesla opened its first Gigafactory in Nevada, one of the largest battery factories in the world to produce batteries for Tesla's EVs and energy storage products. Today, the factory is also working on developing its own battery technology, as it aims to make it more efficient and cost-effective than existing technology. Since the first Gigafactory opening, Tesla has gone on to open an additional two Gigafactories in the US out of its five worldwide locations.

​​LG Chem's Factory in Michigan

South Korea’s LG Chem, a major supplier of batteries to automakers, opened a battery factory in Michigan in 2013. There, it produces batteries for several automakers, including General Motors, Ford, and Hyundai, and has been expanding its production capacity to keep up with the growing demand for EVs in the US. Furthermore, LG is investing $4.5 billion in another EV battery plant and is in talks with General Motors about building a second joint venture.

Panasonic’s Factory in Nevada

As a major supplier of batteries to Tesla, Panasonic currently operates a battery factory in Nevada that produces batteries for their EVs. To keep up with the growing demand for EVs and compete in the increasingly competitive EV battery field, Panasonic is building a $4 billion EV battery factory in Kansas, which will be its second location in the US.

Recycling and Sustainability

With the focus on sustainability increasing, it is an important consideration in the growth of the US EV battery market. As such, companies are looking for ways to recycle and reuse batteries to help to reduce the environmental impact of battery production and disposal. Sustainability initiatives in the US EV market include battery recycling programs and government regulations.

Battery Recycling Programs

An increasing number of companies are starting to implement battery recycling programs to recover valuable materials from used batteries. Indeed, Tesla has a battery recycling program that claims to recover 92% of materials with its recycling program including lithium, copper, and aluminum. The recovered materials can then be used to produce new batteries. Moreover, certain companies such as GM are exploring the use of used EV batteries in second-life applications, such as energy storage. As such, the American OEM partnered with several companies to repurpose used Chevy Volt batteries for energy storage systems that can provide two hours of backup power for three to five average homes.

Government Regulations

In addition to company recycling programs, the US government has implemented regulations to encourage the recycling of batteries and reduce the environmental impact of battery disposal. Indeed, the Battery Innovation Act passed in 2019 provides funding for research and development of battery recycling technologies. The aim is that by 2050, battery recycling in the US could supply 22%-27% of lithium, 40%-46% of nickel, and 45%-52% of cobalt needed for EVs. Moreover, the federal Bipartisan Infrastructure Law has dedicated $3 billion to a battery material processing program and an additional $3 billion for domestic battery manufacturing and recycling. This will be divided between a battery design, recycling, and reuse program, a collection and recycling programs, retailer battery collection programs, and the Lithium Ion Battery Recycling Prize.

What Does the Future Hold?

As the EV industry continues to grow, more and more of the supply chain is likely to move to the US as carmakers seek to be more self-reliant from China. Furthermore, with more demand, there will be an increase in mining companies, companies focusing on making metals for advanced electrodes, battery makers and EV factories. As a result, new technologies supporting cost reduction are likely to be rapidly opted for along with the exclusive adoption of technologies that can seamlessly be integrated into existing production lines. Additionally, it is likely that the US government will continue to support the industry through incentives, funding, and regulations, that more companies will invest in the production of batteries in the US, and that recycling and sustainability will become even more important in the industry.

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