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To support EV battery production, Biden turns to Defense Production Act

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As part of a series of actions being taken to address gas prices and energy affordability, the Biden administration last week turned to a wartime tool to help ramp up the availability of critical materials needed for electric vehicles, sooner. 

According to a White House release, the Defense Production Act will be authorized to support lithium, nickel, cobalt, graphite, and manganese, among other minerals and materials, as needed for “large capacity batteries” for transportation and the power sector. 

As Bloomberg pointed out, the DPA goes back to 1950 and has seen a range of uses over decades—from steelmaking for the Korean War to Trump’s call for mask production. 

In terms of actual financial incentives, mining companies will be able to access $750 million from a federal fund. 

“We need to end our long-term reliance on China and other countries for inputs” for domestically made EVs and cheaper, cleaner electricity, Biden declared in official remarks. 

EV battery cathode material price trends, 2010-2021 – U.S. DOE

Although the U.S. pioneered many of the methods of mining and extraction globally, it sold or surrendered many of those facilities in previous decades, and it takes years to develop new mines and processing facilities. As Bloomberg points out, the U.S. relies on 100% of its graphite, manganese, and rare earth ingredients from other countries, while the vast majority of vanadium, antimony, and cobalt come from outside the U.S. 

As we recently noted, this is especially the case with cobalt, with facilities in the Democratic Republic of Congo largely under the control of Chinese companies—making the U.S. more subject to price volatility.

Coal Mine

Coal Mine

Senator Joe Manchin, the Democrats’ holdout over some of the most aggressive supply-chain actions that might have been contained in the Build Back Better infrastructure supplement, has taken some puzzling and hypocritical positions about electric vehicles. Most notably, he has pointed to the dominance of China in mined materials and compared the battery supply-chain pinch to the 1973-74 oil crisis. The latter event was one of the first uses of global oil supply as a weapon. 

Manchin’s home state of West Virginia depends on mining—of coal, an export to the rest of the world. 

Until Congress can align on stronger infrastructure spending to help build the supply chain to a next level, executive actions such as this and the Executive Order that originally sounded the alarm bell are baby steps to gain U.S. mineral and metal preeminence back. 

This article was originally published by Greencarreports.com. Read the original article here.
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