To address today’s climate crisis, we need a battery revolution. Here’s how we get started.

Carlos Tavares, CEO of automaker Stellantis, recently predicted that the world — especially the electric vehicle industry — could suffer from battery supply problems by 2025 or 2026.

Tavares's prediction may be optimistic.

Tavares's natural vantage point makes it likely that he was dominantly considering batteries for the electrification of passenger vehicles. However, automakers are arguably in a better position?to receive supply thanks to the industry's size and growth, it typically enjoys top priority from battery makers.?

But the battery industry provides critical components to so much more:?drones, watercraft including ferries and recreational craft, heavy construction and mining equipment, and soon, such exotica as air taxis. Batteries represent the backbone of our transition to clean energy because when energy is generated through renewable sources, we must use it, lose it, or store it in batteries.?

So, if the seemingly extraordinary growth predictions are correct,?where are all those batteries going to come from? Just as important, where will they go?

The truth is that the battery industry has been caught flat-footed by a massive spike in demand, and it's going to take time, a lot of teamwork, and execution to build a solid US battery value chain served by strong U.S.-owned and operated battery companies.

How did we get here?

Malone's Law captures our current predicament:?"Technology revolutions take longer than we predict but arrive sooner than we're prepared for them."

We?anticipated, discussed, held conferences, and listened to analysts' warnings about the coming battery demand crunch for two decades.?At first, electric vehicle adoption was slow?—Tesla is a 20+-year-old company — and our attention to these predictions has ebbed and flowed.?

Then, seemingly overnight, the predictions became real.?

In 2020, while we were distracted by COVID, battery demand hit an inflection point.?Approximately 5% of the world's cars are now electric, increasing the demand for batteries and battery components exponentially. The market we envisioned is here?now.?

Tesla is often seen as the poster child for battery-powered electric vehicles (BEVs),?but equally impressive has been the sheer number of new model announcements from the major vehicle makers, "fast followers" who now all appear to be transitioning to electric.?It's one thing when?a small startup like Rivian Automotive?announces an electric truck; it's another when Ford rolls out the Lightning — the EV version of the F-150, the most popular vehicle in the United States — and captures the imagination of every pickup?truck?driver in the world.?

And then there are the developing applications of battery tech that stem from our yearning to untether everything. Think about recreational vehicles.?Would the parents of tweens consider a week-long family trip to the great outdoors with none of the luxuries to which we've all become accustomed? Today's campers want to "Boondock" — no public campground or utility hook-ups for these travelers. They want to visit the unwired places of the world and still be able to run their laptops, iPads, refrigerators, and air conditioners for a week.?We can have it all. Or can we?

Can we manufacture our way out of this supply problem?

The ugly truth is that even if all the anticipated battery manufacturing capacity comes online on time, demand will outpace supply well into the next decade.?That is why, in 2021, my company pivoted from our initial plan of licensing technology to customers to becoming a battery cell manufacturer.?Many of our competitors and industry peers are doing the same. But can we compete with the sheer size and cost structure the Asian incumbents enjoy? To ensure the success of domestic manufacturing, we must focus on the entire supply chain.

Consider the top of that chain: raw materials.?Major new extraction projects are multi-year developments, like the recently announced plans to extract lithium under the Salton Sea in the Southern California desert.?

In the meantime, the U.S. market continues to depend on materials supplied by unstable or unfriendly nations, such as the Congo (source of much of the world's cobalt) and China (80% of the world's graphite reserves and complete domination of cathode materials production).

How is America responding?

The Biden Administration is allocating dollars to solutions. The federal government needs to invest strategically in domestic manufacturing to ensure that the bulk of the capital gets invested in companies ready to scale and execute, ensuring domestic producers can compete with the well-entrenched, globally expanding Asian incumbents.

The federal government will need to focus the bulk of its funding on solving the big problem: building a robust domestic supply chain operated by domestic manufacturers. It can then allocate a smaller portion of funds to firms developing new battery technology that will help address the problems we will face in 2030 and beyond. After all, there are other agencies with dedicated funds for technology development. Coordinating with these agencies will equip the U.S. battery industry with cutting-edge, IP-rich technology to further our leadership as an industry.

What about reusing and recycling our old batteries?

Even if the low estimates are correct, we are about to be buried in hundreds of billions of "dead" batteries. (I use that adjective carefully because the typical EV battery is considered spent when it reaches only 80 percent of its initial capacity.)?Some spent cells may be used for "second-life" purposes, such as stationary backup power supplies for homes, commercial buildings, or electric vehicle charging stations. But due to the chemistries used in automotive batteries, most will need to be?recycled to extract their lithium and other key components.

Where will all those batteries go??If we don't act now, they will go to the landfill. Instead, we need a recycling program for lithium batteries that matches the 99 percent recycling rate for lead-acid batteries. And new business models need to be considered to incentivize good practices.?

This is yet another priority that federal dollars can help address. There are companies developing and commercializing battery recycling. But?for these companies to make a dent in the coming supply, they will need to scale quickly, which requires capital.??

What comes next?

As an entrepreneur, I am an optimist by nature.?I spent many years as a venture investor, so I've watched the adage "necessity is the mother of invention" play out many times. For the last 60 years, the computer chip revolution and its unprecedented pace of change has been declared dead multiple times. And yet each time, clever innovators and entrepreneurs find ways to work around the limitations to drive us forward.

That will happen in batteries, too, if we combine the right focus with the appropriate resources. We need to focus on establishing a domestic supply chain, starting with materials extraction and mining, novel battery materials processing and manufacturing a clean, efficient, and high-performance product. We also need a historic increase in battery cell manufacturing and more incentives for recycling and reuse.

We have to solve the battery problem to meet the challenges of our global climate crisis. And to do that without trading one form of energy dependency for another means that we should start at home by supporting intelligent people and companies.

?Annette Finsterbusch is President and CEO of EnPower Inc., based in Indianapolis.