Harnessing Australia's Potential in Lithium-Ion Battery Manufacturing
By Andrea Persico
Electric Vehicle Transition Consultant and Carbon Zero Initiative Clean Energy Champion
The May 14 budget announcement by the Albanese Labor Government included a $22.7 billion Future Made in Australia package, which marks a significant moment for Australian manufacturing and technology. Particularly noteworthy is the commitment of over $500 million towards the Battery Breakthrough Initiative, aimed at expanding Australia's battery manufacturing capabilities.
Rechargeable batteries, almost universally focusing on Lithium compositions, are central to global renewable energy efforts to reach net zero emissions targets. They are used in small portable devices, small engine replacements, electric vehicles, and critically, for large energy grid storage, facilitating the transition away from fossil fuel power stations towards clean energy generation from wind and solar.
Australia is a major exporter of raw natural resources. The rising global demand for critical minerals, especially lithium, presents a new opportunity. Instead of only exporting these raw materials, there are significant advantages in adding value domestically by developing job rich local processing and manufacturing industries. As the world's leading producer of lithium and with the demand for lithium-ion batteries surging—driven by the boom in electric vehicles and the integration of renewable energy—this strategy positions Australia to capitalise fully on its natural resources while fostering economic growth and sustainability.
Australia's initiative to capitalise on this demand through the Battery Breakthrough Initiative is timely, but we have hard work ahead to compete with China’s near monopoly on lithium processing. Australia’s approach is not occurring in isolation. Globally, there is a growing trend of moving manufacturing closer to the sources of raw materials to reduce costs and environmental impacts associated with transporting these materials long distances. By developing its manufacturing capabilities, Australia is not only expected to reduce its environmental footprint but also to secure a more stable and resilient supply chain for critical battery components.
The Australian budget announcement preceded a US announcement by President Biden on May 15th that Chinese manufactured EVs would face a 100% tariff on imports, to protect the US car manufacturing industry.
The government’s strategy includes more than just manufacturing; it extends to innovation through a $1.7 billion Future Made in Australia Innovation Fund, aimed at unlocking private capital in new industries like green metals and batteries. This is complemented by the $1 billion Solar Sunshot program, for manufacturers within the solar panel supply chain.
The plan includes a ‘strategic examination’ of Australia’s research and development (R&D) system, and significant investments in STEM education, particularly a commitment of $38.2 million to boost diversity in STEM.
This push towards enhancing Australia’s value added manufacturing capabilities recognises the economic and environmental benefits of being at the forefront of the global energy transition and could serve as a catalyst for Australia to transform from a primary producer to a leading innovator and manufacturer, with economic benefits for the country and cost benefits for consumers.
