President Joe BidenTo encourage domestic production, the Defense Production Act is being invoked. This will allow for long-term energy storage as well as electric vehicle batteries. The U.S. will be less dependent on foreign supply chains.

This order by the president could enable companies to apply for government funds for feasibility studies for projects that involve extracting materials for EV production.

President Harry Truman created the Defense Production Act during the Cold War. This law allows for the president’s emergency authority to prioritise the development of materials that will be used in national production.

“The President will issue a directive, authorizing the use of the Defense Production Act to secure American production of critical materials to bolster our clean energy economy by reducing our reliance on China and other countries for the minerals and materials that will power our clean energy future,” the White House said in a statement on Thursday.

The White House stated that the Department of Defense would impose this authority by using strong environmental, labor and community consultation standards. Additionally, the administration stated that it is reviewing other uses of this law in order to provide America with safer, cleaner and more resilient energy.

The transportation sector is one of the largest contributors to U.S. greenhouse gas emissions, representing about one-third of emissions every year. It is crucial to make the transition from gasoline vehicles to electric cars if we are to stop human-caused climate changes.

Lithium demand has also boomed as more auto companies race to develop EVs. Growth in the number and size of batteries for EVs could comprise more than 90% of lithium demand by 2030, according to the firm Benchmark Mineral Intelligence. Alix Partners forecasts that 24% to 33% of the new global vehicles will be entirely electric by 2030.

“We look forward to hearing the exact details of the President’s announcement. But the Biden Administration should be commended in their efforts to secure critical minerals like lithium here, at home,” Lithium Americas (a resource company focused exclusively on lithium development) stated in a release.

In February, the administration unveiled a plan to allocate $5 billion to states to fund  EV chargers over five years as part of the bipartisan infrastructure package. The U.S. world’s third-largest market for EVs behind China and Europe.

Sierra Club President Ramón Cruz said in a statement that the organization “appreciates President Biden taking steps to invest in clean energy and help further lead the world in the transition.”

Cruz said, “It’s important that this is done correctly.” “We need to ensure that the labor and environmental standards of our communities are upheld, as well as crucial consultations with Tribal Nations and Tribal communities that would be directly affected.”

On Thursday, the White House also made public a announcement. new release of oil from its strategic reservesTo reduce gas prices in the United States and to fight inflation. This announcement is made as part of an effort by the Administration to curb rising energy prices. prompted by Russia’s invasion of Ukraine. 

— CNBC’s Cat CliffordContributed reporting