The U.S. Department of Energy last week released a new three-step plan to localize the supply chain of batteries and reduce America’s reliance on China. The plan may not even mention electric vehicles, but the EV market could be among its biggest beneficiaries if successfully executed.

Citing data from research firm BloombergNEF, the DOE said demand for batteries would increase four fold between 2025 and 2035, from 179 gigawatt-hours to 707 GWh. The demand is expected to skyrocket across sectors including transportation, the power grid, AI data centers, consumer electronics, and drones.

While the report acknowledged that America’s battery cell and pack manufacturing had improved over the past few years, the core supply chain was still heavily reliant on imports. That means things like raw material mining and the production of a battery’s subcomponents such as anodes, cathodes, electrolytes, and separators were still largely happening overseas, mostly in China.

To fix this, DOE said a new three-step plan was necessary, and the following are its objectives:

In part one of this plan, the focus would be to invest in the battery supply chain. “DOE is prioritizing investments to shift from a discontinuous, import-reliant supply chain to an integrated domestic production system through the upstream (mining), midstream (refining and engineered materials), and downstream (cells, packs, and end products),” the DOE said. It added that it would focus on targeted investments in companies that specialize in extraction, recycling, refining, and equipment manufacturing.

Part two outlines developing and commercializing next-generation batteries that are right for their specific applications.

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