New U.S. Battery Entrant Targets Fully Domestic Supply Chains

In July, 2021, U.S. President Joe Biden committed his administration to mounting what he called a “whole of government” effort to establish secure supply chains for the technology needed to create his targeted transition to renewable energy and electric vehicles. One crucial target for that effort is to liberate supply chains for lithium and other minerals needed for batteries to power the EVs and provide energy storage for wind and solar generation from dominance by China.

Progress towards this objective has been slow to develop in the intervening 18 months since Biden’s announcement, and China has made clear that it will not stand still. Last week, the Bolivian government announced it has chosen a consortium led by Chinese battery maker CATL to help develop that country’s huge reserves of lithium. The deal provides China with a foothold in South America’s Lithium Triangle, the world’s biggest known store of lithium which straddles the borders between Bolivia, Chile and Argentina. It is a reserve of lithium the U.S. would like to be able to tap for its own future needs.

The Biden administration received better news Monday, as battery maker Statevolt announced the successful acquisition of 135 acres near the Salton Sea in Southern California to serve as the site of its planned 54GWh Gigafactory. Statevolt plans to manufacture both transportation and stationary storage batteries using supply chains for lithium and its other needs sourced entirely in the United States. Statevolt says its battery plant will be technology-agnostic and utilize a modular production process that will create a high degree of versality, enabling the manufacture of a variety of battery products in what has become a rapidly-evolving technology space.

At full operating capacity, the Gigafactory will be one of the largest in North America, with capacity to produce batteries for 650,000 electric vehicles a year. The operational concept is what the company calls a “hyper-local strategy” designed to not only streamline material acquisition and supply chains but also to encourage renewal, economic growth and environmental improvements in the area.

Statevolt CEO Lars Carlstrom told me in a recent interview that the plan is for the lithium to be sourced from the nearby Salton Sea and the brine beneath its surrounding salt flats. To that end, Statevolt entered into a supply agreement last year with Controlled Thermal Resources (CTR), which will provide the needed lithium and geothermal power from their Hell’s Kitchen Lithium and Power plant.

In our interview, Carlstrom also emphasized the positive economic and employment impacts the joint project would have local communities. “When I identified Salton Sea, which is something I had been following for many years, I saw it had been so vibrant and so alive for during the fifties, sixties and seventies before falling into decline,” he says. “But what we’re doing now can help revive this area and also contribute to solving the problems with environmental issues. It’s a great opportunity to change things.”

Sean Wilcock, Vice President of Imperial Valley Economic Development Corporation (IVEDCEDC
), supported Carlstrom’s thoughts, saying “Creating up to 2500 full time jobs the Statevolt project and its significant investment will be a monumental boost and rebirth for our local economy. Working alongside Imperial Valley College and other regional institutions, curriculums will be designed and administered to upskill our local workforce seeking new opportunities and higher wages for underserved citizens.”

The project and its objectives provide a potential success case in the supply chain effort for President Biden and his officials to point to in the months to come. Congressional Democrats can take some credit as well, given that Statevolt credits the new incentives for green energy contained in last year’s partisan Inflation Reduction Act for providing “significant impetus to accelerate its plans to develop its Gigafactory in Imperial Valley.”

Our interview also provided Carlstrom an opportunity to clear up a 30 year-old matter that has dogged him professionally. He was convicted of tax fraud in Sweden in 1993, receiving a fine and community service obligations as a result.

When I raised the question, Carlstrom said the issue arose following a failure to make a filing related to Sweden’s Value Added Tax (VAT) in a timely manner, which he said was simply an oversight. “This is an issue from more than 30 years ago. It relates to a misfiled VAT return, where my accountants accidentally missed the filing deadline. It’s regrettable and frustrating, but I paid all the necessary fines and conducted 60 hours of community service.”

He also reiterated that this was not a case of any effort to avoid paying the taxes, but what would today be considered a filing error. “We got the wrong advice and we corrected the situation at the earliest opportunity. We were one or two months late, as I recall, and that’s it. I strongly maintain that there was never any intentional wrongdoing.” he said.

Given that the statute of limitations expired in 1998, it seems well past time to move on. What matters now is the ability of Carlstrom and his team to move ahead with a project that is tailor-made to help meet the key Biden objective of repatriating supplies and supply chains for a critical green energy mineral. This week’s announcement represents a big step down that road.