U.S. bolstering supply chain resilience for EVs

THE ASSOCIATED PRESS

Facing higher oil prices after Russia’s invasion of Ukraine, U.S. President Joe Biden is planning to invoke the Defense Production Act to increase the mining of critical minerals for the batteries used in electric vehicles.

A person familiar with White House plans said production will occur under strong environmental and labor standards. Greater federal support for alternatives to fossil fuels would reduce the leverage of Russian President Vladimir Putin and others on matters of U.S. national and economic security, though it reflects a long-term play rather than an immediate response to the economic damage caused by the war.

The order employing the Defense Production Act would provide a financial incentive to develop a domestic supply chain for electric vehicles and enable the shift away from gasoline-fueled cars and trucks. (Pictured: U.S. President Joe Biden, second from left, tours a General Motors electric vehicle plant in Detroit, Michigan, in November 2021.)

Putin’s invasion of Ukraine rattled global energy markets for petroleum and natural gas. President Biden is looking to invoke Title III of the 1950 Defense Production Act, which provides the government with economic authorities to address industrial shortfalls. Mining companies could access money under the law for production of minerals including lithium, nickel, graphite, cobalt and manganese.

The government would not issue loans or directly buy minerals. The funding would instead cover feasibility studies, production at current operations, and modernizing safety standards and production.

A bipartisan group of senators, led by Sens. Joe Manchin, a Democrat from West Virginia, and Lisa Murkowski, an Alaska Republican, have urged Biden to deploy the Defense Production Action to boost the domestic output of critical minerals such as lithium and graphite.

“The United States relies almost exclusively on foreign nations — many of them unfriendly and with nonexistent labor and environmental standards — to meet much of our present mineral demand,” the senators said in a letter to Biden. “Allowing our foreign mineral dependence to persist is a growing threat to U.S. national security, and we need to take every step to address it.”

IMAGE CREDIT: THE ASSOCIATED PRESS