May 13, 2022

Biden invokes Defense Production Act to secure electric vehicle battery supply chain – Power & Pipes

US President Joseph Biden issued a directive to the Secretary of Defense on March 31, invoking the Defense Production Act (DPA) to boost domestic production of critical minerals needed to produce high-capacity batteries for the military sectors. automotive, mobility and stationary electricity storage. .

The president’s executive branch action is a direct response to the Biden-Harris administration’s long-standing concern that the existing supply chain and domestic capabilities for large-capacity battery production are insufficient to meet current and projected production and domestic consumer demand for the growing electric vehicle (EV). Marlet. The administration’s action is also aimed at relieving the United States’ dependence on foreign oil while facilitating a rapid transition to a clean energy future.

The DPA empowers the President to shape national defense preparedness programs and take appropriate actions to maintain and strengthen the national industrial base. While the DPA was originally enacted in 1950, it is now used to enhance and support national preparedness for response to and recovery from natural hazards, terrorist attacks and other national emergencies.

Under the DPA, the President can require companies to prioritize and accept contracts for materials and services necessary to promote national defense, induce the national industrial base to develop the production and supply of materials and goods reviews and establish voluntary agreements with private industry. The president may delegate these powers to heads of departments and agencies.

President Biden’s action reaffirms the administration’s commitment to the growing electric vehicle industry and could have far-reaching effects on the nation’s electric vehicle industry.

Currently, the United States is largely dependent on foreign sources to supply the minerals and materials needed to build electric vehicle batteries. These minerals typically include lithium, nickel, graphite, cobalt, and manganese. Purchasing and importing these materials is expensive and an obstacle to the growth of the electric vehicle industry in the United States. President Biden’s use of the DPA will encourage the growth of the electric vehicle sector through funding for feasibility studies, production of co-products and by-products in current mining operations, and productivity/safety upgrades.

The administration’s commitment to national mining and battery production capabilities adds to the significant funding opportunities made available with the November 2021 enactment of the bipartisan Infrastructure Act.

Through this act, the Department of Energy (DOE) is making nearly $2.9 billion in grant opportunities available to private sector applicants to pursue second-tier processing, manufacturing, and application initiatives. use of battery materials. Interested applicants are currently awaiting the DOE’s release of funding opportunity announcements for these programs, which the DOE estimates will be released in late April or early May. This, of course, is in addition to the $7.5 billion in funding the Infrastructure Act has made available in grant opportunities to develop a nationwide network of publicly accessible EV chargers.