Australia Eyes a Bigger Slice of the Battery Boom

A new funding push aims to move Australia’s battery industry beyond mining, encouraging local manufacturing and stronger, more resilient supply chains

9 Jan 2026

Australia is seeking to reshape its role in the global battery industry as a new government-backed funding programme encourages companies to move beyond exporting raw materials and invest in local manufacturing.

The Battery Breakthrough Initiative is designed to support projects across battery materials, components and, over time, finished systems. While most proposals remain at an early stage, the policy signals a shift away from the country’s long-standing reliance on shipping unprocessed resources overseas.

Mining remains central to Australia’s economy, particularly in lithium and other critical minerals. But policymakers argue that higher margins and more stable growth increasingly lie downstream, in processing and manufacturing. By supporting early-stage investment, the initiative aims to reduce risk for companies willing to extend further along the value chain.

The push comes as global demand for batteries rises, driven by electric vehicles, grid storage and renewable energy. At the same time, trade tensions and geopolitical uncertainty are prompting governments and manufacturers to rethink concentrated supply chains. Building domestic capability is seen as a way to improve supply security and industrial resilience.

Resource groups are assessing what the shift could mean in practice. Pilbara Minerals, a major lithium producer, has benefited from low-cost extraction but remains exposed to swings in global prices. Greater integration into processing or closer links with battery makers could, over time, help smooth earnings. Lynas Rare Earths provides a partial precedent, having expanded its processing operations in Australia with government support, though large-scale battery cell manufacturing remains limited.

The obstacles are substantial. Battery manufacturing is capital intensive and depends on skilled labour, specialised equipment and access to global customers. Some projects may also reach production during weaker market conditions, testing their economics.

Even so, industry sentiment is cautiously positive. The initiative aligns Australia with a broader international move towards regionalised and cleaner supply chains. Whether it is enough to shift the country from a supplier of raw materials to a participant across more of the battery economy will depend on sustained policy support and the pace of global demand.