The act grants the president emergency powers to alter domestic manufacturing policy in times of crisis.
Passed during the Cold War era, the DPA was first used by president Harry Truman in 1950 to make steel for the Korean War. It was most recently invoked in by Donald Trump, in 2020, to increase mask production during the pandemic, and last year by Biden to expand vaccination efforts.
This push also comes as several senators sent Biden a letter asking him to make use of executive powers, such as the DPA, to make the US less dependent on oil drilling abroad and support the country’s climate goals.
In a separate letter seen by Bloomberg, another group of senators urged Biden to accelerate EV battery production and reduce the country’s dependence on China for the processing of minerals and raw materials.
As per the letter:
In order to address the threats to our national security, we respectfully request that you invoke the Defense Production Act (DPA) to accelerate domestic production of lithium-ion battery materials, in particular graphite, manganese, cobalt, nickel, and lithium.
In fact, the number of mineral commodities for which the US relies on imports — to meet more than a quarter of demand — has increased from 21 in 1954 to 58 in 2021, according to the White House’s June report on the national supply chain.
What could the DPA do?
The move would open up federal funds for US mining companies that produce the materials — estimated at $750 million.
Instead of loans or direct purchases for minerals, the funds would target feasibility studies, production at existing operations, or new advancements to improve productivity or safety.
The draft of the executive order currently remains in a “pre-decisional phase,” awaiting for Congress approval.
If the act is passed, it’ll signal Biden’s most aggressive step to shift the country towards electric vehicles, followed by the infrastructure bill’s $174 billion investment in EVs, and the target for zero-emission vehicles to reach 50% in nationwide sales by 2030.
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