Economic & Industrial

Biden keeps funds flowing to build US electric vehicle supply chain

Biden keeps funds flowing to build US electric vehicle supply chain
Mining News Pro - President Joe Biden has taken lots of heat for stoking inflation with government spending. It’s not stopping him from keeping the spigot open to fund a domestic electric vehicle supply chain.
  Zoom:

The latest sum of support was tucked into the Ukraine aid bill that Biden signed into law late last month — another $500 million to expand funds available under the Defense Production Act to obtain critical battery minerals like nickel, cobalt, lithium and graphite.

That adds to the $750 million fund mining companies could access when the president invoked the Defense Production Act in March. The Ukraine bill also lifted the cap on the size of grants and expanded eligible projects to include the UK and Australia, as well as the US and Canada.

All this builds on $7 billion in federal funding that was part of the bipartisan infrastructure bill passed last year. Those grants — which companies are now jostling for — target areas including battery manufacturing, recycling and materials processing. Biden’s use of the Defense Production Act, a Cold War-era power that President Trump also invoked to combat shortages at the outset of the pandemic, is focused further upstream, on mining and recycling.

There’s some overlap, but that’s OK, because it still doesn’t come close to matching what China has invested in this space, said Ben Steinberg, a lobbyist who represents mining companies at Washington-based Venn Strategies.

“The funding is going to be heavily oversubscribed, and they won’t be able to nearly fund everyone or what they deem good projects,” Steinberg said. “This adds a little cushion to it.”

One of the companies seeking funds under the Defense Production Act, as well as the infrastructure bill, is Indiana-based American Resources, which has developed a way to process recycled battery materials that’s cleaner and safer than what’s currently done in China, according to Chief Executive Officer Mark Jensen.

This approach, which stems from work done by scientists at several universities and Eli Lilly, borrows concepts from the pharmaceutical industry to isolate and purify certain elements to turn them into production-ready cathode material. Cathodes and anodes are the two components of a battery that store lithium ions. The federal grants would amount to just a slice of the company’s capital expenditures, he said.

Jensen says he hasn’t had any trouble raising money privately — he’s opening a facility in Indiana this month that will process minerals for rare earth magnets used in things like electric motors, as well as missiles and drones. But he still thinks the government money is important.

“What the administration’s capital will provide is just faster growth,” he told me. “It’ll help us work with more collaborative partners faster.”

Beyond money, the government grant process is forcing companies to seek partners and organize who will tackle which piece of the supply chain, Jensen said. He’s already talking to a few automakers that are racing to find ways to source battery minerals domestically.

“It’s herding the cats and making it happen quicker, better and stronger,” he said.

Biden’s goal is for half of US passenger car and light-truck sales to be zero-emission by 2030. Current EV manufacturing will have to grow 15 times to do that, according to a Defense Department presentation obtained by Bloomberg.

Jensen thinks that’s probably not realistic, but he’s happy to try — it’ll be good for business.

I couldn’t help but wonder what this will do for Biden’s inflation woes: more companies flush with cash, scrambling for materials, equipment and labor. The sudden surge in demand for components is already pushing up metal prices and making EVs more expensive.

Anna Wong, Bloomberg Economics’ chief US economist, said that unlike pandemic stimulus checks or student debt cancellation, the Biden administration’s investments in EV infrastructure won’t be inflationary. The DPA funds are a drop in the bucket, and infrastructure spending will be spread out over several years, so it’s unlikely to affect prices today.

“With China sticking with zero-Covid policy, and now elevated geopolitical tensions, this will shield the economy from supply shocks,” she wrote in an email. There’s “more benefit than harm.”


   Short Link:  
Related News
chadormalu Co.
khuzestan steel
IranAluminaJaajarm
sangan steel
sabasteel