Biden can invoke Defense Production Act for EV battery materials

According to multiple reports from major news outlets, President Biden may be moving forward with the US Defense Production Act, an ancient power play that would encourage and even mandate the extraction and production of minerals used in electric car batteries.

We saw a similar situation during the Trump presidency when companies were encouraged to manufacture masks and ventilators. Biden actually used the powers early in his presidency to ramp up production of supplies needed to deal with the COVID-19 pandemic.

Essentially, the Defense Production Act gives the President the power to require various businesses and corporations to change their priorities to meet the government’s needs in times of war, conflict, or other hardship. However, in the past, many US presidents have spoken out about the law and encouraged its use, despite not having officially mandated it. If invoked and applied to its full potential, the law could allow the government to fine or imprison people who refuse to comply with its orders.

Anyway, we are in the middle of an oil and gas crisis due to the Russian invasion of Ukraine. Not to mention the persistence of one of the worst global pandemics in history, supply chain shortages and epic inflation. While one of the top priorities right now seems to be getting the price of gas down, getting the supply chain situation right is crucial. While most automakers are stepping up their efforts on electric vehicles, batteries are already in short supply and the situation will likely only get worse.

Shortly after the Russian invasion of Ukraine began and gas prices spiked, Tesla CEO Elon Musk tweeted:

Certainly, Musk is aware that Biden could force aid in the extraction and production of battery materials, which would help Tesla and lead to cleaner energy. However, producing batteries and new electric vehicles to install them will not happen overnight. Specifically, people who cannot afford gasoline will not be able to get back on the road quickly.

That said, it seems like a sound plan as we look to the future, with plans to significantly reduce our dependence on foreign countries for oil. However, in the short term, there is arguably more urgency to help people afford to fill up their cars at all costs.

Recent reports from people like Bloomberg and Automotive News suggest that President Biden could use the Defense Production Act as early as this week. Teslarati notes that the president could push for the mining and production of a host of minerals used in EV battery cells, including cobalt, graphite, lithium, manganese and nickel.

People familiar with the situation have claimed Biden could provide corporate funding to help with mining and production as part of a $750 million effort. Additionally, it could work with battery recycling companies to accelerate the recycling and reuse of key materials.

Regardless of whether or not the president uses his powers to impose such situations, it is worth considering. While such efforts don’t compare to the immediate impact of helping families put gas in their cars, it could work to ensure we don’t end up in a situation like this in the future.

As part of the Biden administration’s plans to curb climate change and promote electric vehicles, moves to increase domestic extraction, production and recycling of EV battery cell materials arguably make sense. . Fortunately, the administration has already earmarked $6 billion of the infrastructure bill to help the battery supply chain in the United States. We’ll have to wait and see how it all pans out.

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