Biden Makes Raw Material Supply for E-cars a Top Priority

31. March 2022 | Market

The USA wants to become less dependent on the import of critical minerals. According to media reports, a law that dates back to the Cold War era is to be activated for this purpose.

To secure the supply of raw materials for battery production, U.S. President Joe Biden may activate the Defense Production Act this week, as reported by CNN and Bloomberg, among others. The law, which had been passed against the backdrop of the Korean War in 1950, equips the president with far-reaching powers. For example, he can require companies to accept contracts deemed necessary for national defense and prioritize them. The law also allows the president to designate materials that may not be stockpiled.

Raw materials needed for battery production include lithium, nickel, graphite, cobalt and manganese. Growing demand due to the increasing production of electric vehicles, as well as the war in Ukraine, have led to a significant increase in prices. The U.S. is also heavily dependent on imports for some of these materials. Expanding domestic production as well as recycling could reduce this dependence.

It is unclear so far whether the Defense Production Act will also be applied to rare earths and other raw materials needed to produce e-cars or wind turbines.
The law has been applied more than 50 times since 1950, for example in the context of measures against the Corona pandemic.

Photo: iStock/lucky-photographer

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