US Battery Belt Grows With $1 Billion Kentucky Cathode Deal

 By Tom Randall

For years, the US electric vehicle industry has grappled with two supply-chain issues: how to source critical materials for battery production, and what to do with old batteries once they’re spent. A deal announced today by Ascend Elements aims to address both challenges.

The Massachusetts-based maker of battery materials said it has reached a billion-dollar deal with an unnamed automaker to reprocess old batteries into cathode material, a substance that’s responsible for more than one third of the expense of a finished EV battery pack. Ascend is building a cathode plant in Hopkinsville, Kentucky, and plans to begin deliveries next year.

The contract covers cathode for at least 40 gigawatt hours of batteries a year, Ascend Chief Executive Officer Mike O’Kronley said in an interview, enough for 750,000 electric cars. In 2021, that would have satisfied the entire US EV industry, but five times as much cathode will be needed by 2025, according to BloombergNEF data. Ascend’s contract marks the second major deal for cathode made in the US, and follows a similar agreement between Nevada-based Redwood Materials Inc. and Panasonic Holdings Corp. in November.

Most of the world’s cathode currently comes from China, but US-sourced battery materials are in increasingly high demand. To qualify for consumer tax incentives passed in last year’s Inflation Reduction Act, EV batteries must be built in North America using materials processed by close US trading partners, which excludes China. Those incentives and others pushed by the Biden administration have spurred more than $70 billion of investments since last August along America’s new Battery Belt, which stretches roughly from Michigan to Georgia.

“When you step back and look at it, we haven’t seen this level of investment in manufacturing in the United States in decades,” O’Kronley said. “This is really just the start. It represents one of the very first commercial realizations of what the US is trying to do nationally.”