The news that broke late last week about the U.S. government loaning $100 million to a California company to open a lithium-ion battery plant in Lynchburg is much bigger than the 100 or so jobs it will involve.
Let’s count the ways.
1. This helps put Virginia in the “battery belt.”
Dixie is the new Detroit: The Southeast has been quietly building a hub of auto-related plants for decades. The Roanoke and New River valleys are part of that, with truck-building operations at Mack Truck in Roanoke County, Volvo in Pulaski County and lots of suppliers in between.
More recently, we’ve seen the rise of one particular auto-related sector across the Southeast: battery plants. About half the battery plants built in the past two years are now in a “battery belt” that stretches from Florida to Kentucky and on up to Michigan, according to a report by the real estate firm Cushman and Wakefield. While Michigan remains the single biggest producer of batteries, Georgia is now a close second, according to the Environmental Defense Fund. Michigan produces 140 gigawatt hours per year, Georgia 136 gigawatt hours, with Tennessee third at 128 hours and Kentucky fourth at 119 gigawatts. This is a new growth industry: The U.S. Department of Energy projects that American production of batteries is expected to increase 18-fold from 2021 to 2030. Anytime a new industry springs up, so do suppliers, so there are also supply-chain jobs that are also clustering in the Southeast. Batteries, themselves, are part of a larger supply chain for vehicle manufacturing, which is also growing in the Southeast, so this is all connected.
What’s been noteworthy about the rise of this “battery belt” is that Virginia has been left out. It’s unclear why Virginia has been left out, but it has been. The state has come close twice. Ford was eyeing the Southern Virginia Mega Site in Pittsylvania County for a 2,500-job battery plant but Gov. Glenn Youngkin nixed the deal because of the involvement of a Chinese battery maker. (The project instead went to Michigan, where it’s currently on hold.) Youngkin made a strong pitch for the Albemarle Corporation, which processes lithium for batteries, to locate at the site, but the firm went to South Carolina to be closer to a needed ore deposit.
If Lynchburg lands the Applied Materials plant, that’s not just an economic win for the Hill City, it’s a win for all of Virginia because it finally puts the state on the battery belt map — and might lead to others.
2. The growth of the lithium battery industry is an American success story.
It’s fashionable to lament that we’re falling behind China, falling behind Asia in general, falling behind somebody somewhere. China does, indeed, dominate the battery market, but its share is shrinking — from 79% in 2021 to a projected 65% by next year, according to Statistica. That’s still pretty overwhelming, but the United States has been mounting a furious comeback.
“In 2019, just two battery factories were operating in the United States with another two under construction,” the technology news site Tech Crunch wrote last year. “Today there are about 30 battery factories either planned, under construction or operational in the country.” Since then, those numbers have gone up even more. North America is now the fastest-growing producer of batteries, according to a report from Clean Energy Associates. That seems worth celebrating.
3. The Biden Administration is responsible for much of this growth in the battery industry.
The growth of the battery industry is being driven by some very specific policies from the Biden administration: to promote reshoring manufacturing, and to invest in new technologies in general. The infrastructure bill that the administration pushed through Congress in 2021 provides $3.5 billion for building up a domestic supply chain for batteries. I’m not intentionally making this political, merely repeating what others have said. The Cushman and Wakefield real estate firm is hardly a redoubt of “woke” climate activists, but here’s what its report had to say: “Since the Inflation Reduction Act (IRA) was signed in August 2022, 77 electric vehicle (EV) projects were announced in the U.S., totaling more than $80 billion in investments and nearly 49,000 in projected new jobs. Nearly half (49.4%) of these projects are concentrated in the Southeast.”
If you really want to get political, try this: Those jobs, primed by Democratic legislation, are mostly going to Republican states. History may someday credit Biden with helping build a new economic sector in the United States, but it’s doubtful that voters in Kentucky, South Carolina and Tennessee will reward him this fall, and it’s still quite unclear how voters in the swing states of Georgia and North Carolina will react. However they go, I seriously doubt many will be basing their votes on American battery policy.
In the case of the Applied Materials plant that appears headed for Lynchburg, the key driver was the 2021 Infrastructure Investment and Jobs Act — $100 million from that act is going to the company. While this is often called the “bipartisan infrastructure bill,” it was only bipartisan in the Senate, where it passed 69-30. In the House of Representatives, it passed on a near party-line vote. Fun fact: The congressman who represents Lynchburg — Rep. Bob Good, R-Campbell County — voted against the bill that may now help 100 of his constituents get jobs.
4. The growth of battery plants is directly tied to the demand for electric vehicles.
While batteries have more uses than in electric vehicles, we need to remember that electric vehicles are basically big batteries on wheels. There’s a lot of partisan debate over how much the government should be mandating a conversion from gas-powered vehicles to electric ones, but the fact remains that auto companies have invested heavily in these technologies — they may wind up foreclosing more consumer choices than the government will.
Critics have pointed out that the demand for electric vehicles has slowed, and that’s true, but only partially true. Kelly Blue Book recently reported that EV sales were down in the first quarter of 2024 — but that was compared to the final quarter of 2023. They were still up 2.6% over the first quarter of 2023, which seems a more accurate comparison. Overall, EV sales in 2023 were higher than they were in 2022 (and that final quarter of the year set a record). Market share for electric vehicles increased from 5.9% to 7.6%, Kelly Blue Book says. The market for electric vehicles is still growing, just not as fast as it was. That raises legitimate questions about how fast the transition will take place — one reason that climate activists are more keen on using the government to facilitate that than relying on the free market. Ford has announced it’s slowing production of electric vehicles, although that may be nothing more than a temporary market correction. Tesla is laying off workers — 10% of its global workforce — but Tesla’s problem is mostly increased competition from other EV makers. Its market share has fallen from 65% in 2022 to 51% in 2024. The overall market for electric vehicles may grow slower than we once thought but there seems no doubt that electric vehicles are a growth industry.
Keep in mind, too, while lithium-ion batteries are most often associated with electric vehicles, that’s not all they’re used for. They go into electronics of all kinds — the laptop that I’m writing this on and whatever device you’re reading it on. Electric vehicles get the attention simply because they’re so much bigger and require a lot more battery power. That brings us to the science at work here.
5. This is Nobel Prize-winning technology.
The batteries most of us buy to put in flashlights are alkaline. When introduced in the 1960s, alkaline batteries were considered an improvement over their zinc carbon predecessors. Just as one new technology arrived, research into its successor had begun. NASA developed one of the first lithium-based batteries in 1965, so this is an example of how the moon program has produced spin-offs that are still changing our world today. The advantage of lithium is that it’s lighter, stores more energy and lasts longer. The trick has been making it work in ways that are cheap enough to commercialize. The story behind that shows the long timelines involved in a lot of new technologies, and the importance of university-based research.
The oil crisis of the early 1970s provided an impetus into research for how the U.S. could become less reliant on fossil fuels. That led to inquiries by Stanley Whittingham of the State University of New York–Binghamton into lithium batteries as a way to store energy — and, just as importantly, be recharged. All around the world, other scientists were also working on other variations of lithium, or, more precisely, lithium ions. (Alkaline batteries work because zinc interacts with magnanese dioxide; lithium because positively charged lithium ions flow back and forth through the battery).
John Goodenough of the University of Texas determined how lithium could interact with cobalt oxide and double a battery’s capacity. In 1985, the Japanese chemist Akira Yoshino of Meijo University used Goodenough’s work to produce the first commercially viable lithium-ion battery. Getting an idea from the lab to the marketplace is slow — not until 1991 did those batteries hit the shelves, just in time for the internet revolution. In 2019, all three of them were awarded the Nobel Prize “for the development of lithium-ion batteries.” The Nobel Committee said that “lithium-ion batteries have revolutionized our lives. … They have laid the foundation of a wireless, fossil fuel-free society, and are of the greatest benefit to humankind.”
Lynchburg now seems primed to become part of this grand technological transition.
