Biden is using wartime powers to boost electric vehicle battery production – Tips & Results

US President Joe Biden is said to be considering using wartime power to boost domestic battery production for electric vehicles. According to reports, the government wants to add the necessary raw materials to the Defense Production Act (DPA) drafted at the beginning of the Korean War in 1950.

Originally designed to give the federal government more control over the US economy (particularly around commodities) during the Cold War, the law was also used by the Department of Defense from the 1980s to push new technologies. In 2011, Barack Obama invoked the law to force telecom companies to provide detailed information to the Department of Commerce’s Bureau of Industry and Security. Donald Trump later invoked the DPA to identify a range of products deemed critical to national security as the trade war with China intensified, and then again to target domestic production of materials and goods related to it of the COVID-19 pandemic.

Biden actually used it on his second day in office to continue ramping up production of supplies related to the pandemic, and then again in March 2021 to ship equipment to Merck facilities that make Johnson & Johnson vaccines. He invoked the Defense Protection Act a third time in September to supplement the supply of fire hoses intended to fight an unusually high number of West Coast wildfires.

The aim this time is to add lithium, nickel, graphite, cobalt and manganese to the government’s list of materials of particular importance. Accordingly Bloomberg, officials who leaked the plan (who reportedly wished to remain anonymous) believe the relevant mining companies could access $750 million under the Defense Production Act’s Title III fund. Funds and facilities may also be established to encourage new battery recycling centers.

Of Bloomberg:

Instead of loans or outright purchases for minerals, the policy would fund production on the fly, productivity and safety improvements, and feasibility studies, the person said. In addition to batteries for electric vehicles, the directive would also apply to large capacity batteries.

Administration officials are working to ensure production takes place under strict environmental and labor standards, a source said. Facing concerns from critics, including some Democratic congressmen, aides are taking steps to ensure the president’s actions don’t circumvent environmental assessments or permitting regulations, the person said.

Several departments, including Energy and Home Affairs, will oversee the effort, the person said.

The directive would also pave the way for Congress to allocate more resources to the effort, said Ben Steinberg, co-chair of the critical infrastructure group at DC lobbying firm Venn Strategies.

“The president’s signature is a big signal, but it falls to Congress to allocate dollars worthy of the challenge,” Steinberg told the outlet, adding that the funds available through the DPA may not be enough as they currently cover numerous need industries.

A bipartisan group of US Senators – including Joe Manchin (D-WV), Lisa Murkowski (R-AK), James Risch (R-ID) and Bill Cassidy (R-LA) – had previously asked the White House to allow a use the Defense Production Act to promote localized battery production. In the weeks that followed, there was wild speculation that this was being considered. But this is the first time we’ve heard the news that the Biden administration plans to move forward.

Critics will no doubt cite this as an example of how the Biden administration is using rules of war to advance its green agenda. But it’s not that cut and dried. One of my many criticisms of the EV transition in the West was that it would overwhelmingly favor the Chinese battery makers, who already dominate the market. Giving the government a head start on domestic competitors while also focusing on the need to source raw materials seems wise if the shift towards electric vehicles is to continue at the breakneck pace it desires. However, legitimate concerns remain about which parties will receive preferential treatment, how funds will ultimately be allocated, and what this means in terms of the ongoing relationship between large corporations and the United States government.

The Biden administration has already allocated billions in funding for electric vehicles in numerous infrastructure bills. But prices for their raw materials have skyrocketed recently, made worse by the war in Ukraine. Bloomberg speculated that this could be a boon to mining operations and help reduce costs while serving to endear the administration to an industry it has previously shunned. Unfortunately, this risks putting the White House at odds with environmental activists who want people to drive all-electric vehicles without having to dig into the ground to source the necessary metals.

[Image: Orhan Cam/Shutterstock]

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