Home / 2024 / March / New research reveals steps California must take to capture more jobs from lithium battery boom
March 26, 2024
By UCSC Public Affairs and New Energy Nexus
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California’s “Lithium Valley” in the Salton Sea region is home to some of the largest lithium reserves in the world, yet California is set to capture only 2.4% of jobs in new planned operations for the nation’s lithium battery supply chain, according to a new study from the UC Santa Cruz Institute for Social Transformation, New Energy Nexus, and the UC Berkeley Labor Center.
Researchers analyzed employment data in the supply chain to create an interactive online map of jobs in relation to labor, climate, and economic justice indicators. The study also recommends how California, and especially the Salton Sea Region, could capture more well-paying “high-road” jobs and community benefits from lithium extraction with more policy focus and stronger labor, community, and tribal partnerships.
California’s Salton Sea region is an underinvested corner of the state where a quarter of the total population, and half of the region’s Native American population, live below the poverty line. Building out a domestic lithium value chain—from processing to battery manufacturing and recycling—could potentially create good jobs, new business opportunities, and meaningful benefits for local communities. And, in recent years, the Bipartisan Infrastructure Law and Inflation Reduction Act have created major financial incentives for domestic lithium battery and EV production.
Still, less than 1% of current and projected jobs resulting from Salton Sea lithium reserves are actually associated with lithium extraction. The vast majority of jobs would be created further along the value chain, like in battery and EV manufacturing. And there are currently no agreements in place to bring those jobs to the Salton Sea region. Instead, most jobs are currently going to states that are ranked low in terms of labor protection, worker health and safety, and wage laws.
“We need to ensure that the jobs in lithium extraction itself in Imperial County are good jobs, but a larger benefit to the region could come from co-locating battery and electric vehicle manufacturing,” said UC Santa Cruz Professor Chris Benner, co-author of the report and faculty director at the Institute for Social Transformation.
Key findings about current and projected trends in lithium battery supply chain development include:
- California is currently the core of the nation’s electric vehicle industry, accounting for roughly 19% of existing jobs in the full lithium and electric vehicle supply chain, by far the highest share of any state.
- California, Arizona, and Nevada account for nearly a third (31%) of jobs in the full lithium battery and EV value chain, but only 10% of planned new investment. These states rank highly in the nation for policies that support good jobs and wages.
- Kentucky, Tennessee, Alabama, and Georgia currently account for approximately 16% of total existing employment along the value chain, but represent nearly 34% of projected jobs in new sites. These states are low-to-bottom ranked in terms of labor protection, worker health and safety, and wages.
- Of the more than 150,000 existing jobs in the lithium value chain in the U.S., 43% are in EV manufacturing, 26% are in battery component, cell, and pack manufacturing, and only 6% of jobs are in mining or critical minerals extraction.
- In the Salton Sea region, the number of jobs from direct lithium extraction will be relatively modest: a few hundred jobs initially, rising to roughly 2,000 ongoing jobs at projected full build-out many years from now.
- The vast majority of jobs associated with the lithium from the Salton Sea region would be created further along the value chain: roughly 1,600 jobs in cathode manufacturing, 20,000 jobs in battery cell and pack manufacturing, and over 100,000 jobs in EV manufacturing. There are currently no agreements in place to bring these jobs to the Salton Sea region, much less ensure these jobs are high-quality or will be targeted for local residents.
However, the study discusses how strategic investments and policy approaches could disrupt some of those trends and encourage build-out of the lithium supply chain within California.
“California has been a world leader in clean energy innovation, and to stay ahead of the curve, it needs to ensure that businesses that innovate in California stay in the state,” said Rebecca Lee, co-author of the report and managing director of New Energy Nexus California. “This means supporting an innovation to implementation pipeline to secure a green manufacturing industry in Imperial County.”
Recommendations for promoting lithium supply chain development in California include:
- Support “high-road” workforce development. This should include conditional public funding for businesses based on negotiated Community Benefits Agreements, as well as training for construction trades, blue collar, and professional and technical workers in Imperial County.
- Strengthen the “innovation to implementation pipeline”: provide benefits for “high-road” companies that develop and manufacture technologies in the state. This should include an increase in funding to clean energy entrepreneur support organizations that support high-road pathways for startup commercialization.
- Invest in local infrastructure. This includes physical and social infrastructure such as public health services, public transportation, climate resilient housing, and environmental restoration related to Salton Sea management and air quality.
- Address permitting barriers. For instance, expedited permitting could be made available for projects that have formalized agreements and support from communities.
- Battery supply chain transparency. Mechanisms must be in place that monitor, measure, and uphold environmental, labor, and air quality standards, such as the Global Battery Passport.
With greater public and private financial support and strong community partnerships, the study’s authors believe California could provide a global model for the inclusive and environmentally friendly economic development of lithium battery supply chains.
This study was supported by a grant from The James Irvine Foundation and represents the culmination of more than a year of research, including input from a wide range of labor, community, industry, public sector, and tribal stakeholders.
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