Friday, January 27, 2023
News The Biden Administration Could Invoke the Defense Production Act to Encourage Battery...

The Biden Administration Could Invoke the Defense Production Act to Encourage Battery Production

The US government could mandate an increase in production of EV batteries in order to speed up the contry's energy independence.

  • The war in Ukraine highlighted the US’ dependency on foreign oil products

  • The government could mandate an increase in battery production to speed up the electric transition

  • This would force companies to mine the materials required for EV batteries

Since the invasion of Ukraine by Russia, the price of oil and fuel has skyrocketed around the world.

This has shown just how much the world, and especially the United States are dependent on fossil fuels. Since one of the major producers of oil, Russia, has been sanctioned against, the price at the pump has reached record highs.

The need to become more energy independent has become much more pressing and this is why many experts believe that the Biden administration will invoke the Defense production act, maybe as soon as next week.

This act will give government the power to force companies to mine the materials required for the production of batteries, such as lithium, cobalt and nickel.

Doing so would allow for a larger supply of batteries, which would reduce their cost and thus allow electric vehicles to be priced in a more affordable way, thus incentivising their purchase.

Many speculate that the president will also mandate the recycling of used batteries in order to encourage the reuse of some of the materials that have to be extracted and refined, which is an expensive and polluting process.

To help compagnies who would have to operate outside of their profit margins due to this act, the government could provide funding as part of a $750 million effort.

This would not be the first time this act is invoked and not even the first time this administration would do it. Indeed, the Trump administration used it to increase the production of masks and ventilators while Biden himself invoked it to maximise the production of other Covid related supplies.

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