Last month, U.S. President Joe Biden signed an executive order instructing his economic and national security teams to conduct a 100 day review of four key U.S. supply chains across federal agencies to assess the nation’s “resiliency and capacity of the American manufacturing supply chains and defense industrial base to support national security [and] emergency preparedness.”
Targeting supply chains for semiconductors, high-capacity batteries, medical supplies and rare earth metals, the White House aims to “identify ways to secure U.S. supply chains against a wide range of risks and vulnerabilities.”
The executive order comes against the backdrop of two recent announcements which mark a pivotal moment for EV battery technology in the United States: President Biden’s declaration to shift the entire federal vehicle fleet to EVs made in America, and General Motors’ announcement to cease production of cars powered by combustion engines by 2035. Undoubtedly, this will further heat up the already “turbocharged” lithium-ion-battery-to-electric-vehicle (EV) supply chain.
As the National Mining Association’s Rich Nolan wrote in a recent RealClear Energy piece, this moment “offers both the potential for significant progress in reducing emissions and the opportunity for the U.S. to win the accelerating race for the future of the auto industry and the millions of jobs it supports.” But he cautioned that “if we don’t get serious about building the domestic mineral supply chain to support it, it’s a race we could lose.”
Followers of ARPN know that we are already “in the midst of a global battery arms race in which the US is presently a bystander” — and that China, having taken the “initiative to build battery capacity at speed and scale” has long taken the pole position.
Citing Benchmark Mineral Intelligence data, Nolan pointed to the fact that while 142 battery megafactories are currently in the pipeline worldwide, of these 107 will be in China, with 53 already actively producing. Meanwhile, there are currently only nine megafactories lined up in the United States.
To succeed in this environment, Benchmark Mineral Intelligence’s Simon Moores says stakeholders will need to understand the lithium-ion-to-EV supply chain, its individual sections, and the linkage between them:
“Automakers who quickly understand the importance of these linked steps in the battery supply chain to the quality and cost of their EVs will be the most successful at navigating the next decade. For governments, the shifts in the economics of the supply chain outlined in this article provide opportunities to create jobs, garner influence over a strategic industry, and establish new trading relationships, particularly relevant as Europe and the United States, under a Biden presidency, will seek to reduce reliance on China as a single point in the supply chain. Those who do not see the importance of the lithium-ion battery will have no meaningful future.”
It’s not too late yet, but time and a firm commitment are of the essence. Concludes Nolan:
“Catching up to China will mean building an EV supply-chain strategy from the mine up. The U.S. has the resources to do it. What we need now is a commitment to prioritize the production and a mines-to-markets strategy that enables us to build infrastructure for the electrification of transportation that will support American industry and millions of American workers.”
President Biden’s executive order and the confirmation of Secretary of Energy Jennifer Granholm are early indications that the current administration understands the stakes. Here’s hoping that decisive action to strengthen our domestic critical mineral supply chains from EVs to Rare Earths and beyond will follow.
