As demand for battery technology ramps up alongside the global electric vehicle (EV) transition, the United States has put plans in place to boost its production of key battery metals. President Biden recently used the Defense Production Act to add lithium, nickel and cobalt to the list of items considered critical for the country’s national defense. The move has miners and battery makers alike hopeful that additional funding will soon be on the way to bolster the mining industry and further clean energy goals.
While the recent announcement is a sign that the US is taking domestic production of battery metals seriously, it is still not enough to ensure battery metal supplies will avoid future deficits. Greater investment into battery technology and mining remains key to sustaining the EV transition.
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US Looks to Boost Domestic Production of Crucial Battery Metals
The electric vehicle (EV) transition has passed the point of no return and continues to put upward pressure on the demand for battery metals. While US automakers’ total sales fell in the first quarter, sales of EVs soared.
Compared to the same period a year ago, Tesla and Polestar both reported sharp rises in first quarter sales in the US. Tesla saw its US sales rise 87.2% to 129,743 units in Q1, and it delivered a record 305,000 vehicles around the globe. Meanwhile, Polestar sales climbed an astounding 1,179.7% to 1,510 units as production aggressively ramped up.
Ford’s EV sales rose a record 37.9% in the first quarter, while GM reported minimal EV sales but expects that category to gradually increase as supply chain disruptions subside. Electrek notes that GM received an impressive 65,000 reservations for its electric pickup truck, illustrating the fact that there is no shortage of demand for EVs.
However, as EV production rises, the demand for key battery metals is increasing faster than supplies can currently keep up.
To counter the projected deficits, President Joe Biden recently used the Defense Production Act to add lithium, nickel, graphite, cobalt and manganese to the list of items deemed critical for national defense. Per Bloomberg, the move paves the way for companies aiming to mine these materials to access a $750 million fund administered by the Defense Department.
Mining advocates are hopeful that the move could mark a shift in US industrial policy that shows the Biden administration is committed to furthering their climate agenda and reduce dependence on China.
According to OilPrice.com, the United States currently imports more than half of its annual consumption of 31 of the 35 critical minerals. As of early 2021, the US imported 80% of its rare earth elements from China.
While the recent announcement could spur additional investment into domestic battery metal mining projects, it is…
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