President Biden signed a directive authorizing the Defense Production Act for usage for the critical materials that go into large-capacity batteries. The President took this action under Title 3 of the DPA which provides for prioritizing and subsidizing the production domestically of key inputs that are critical to the national defense.

A study by the Department of Defense concluded that large-capacity batteries—and the components that go into them, including lithium, nickel, cobalt, graphite, and manganese—are critical to the national defense .

By taking this action, the President is authorizing the government to use the DPA authorities to build domestic production capability in these key materials.

Specifically, the directive notes that:

Sec. 2. Determination. (a) … without Presidential action under section 303 of the Act, United States industry cannot reasonably be expected to provide the capability for these needed industrial resources, materials, or critical technology items in a timely manner; and

(3) purchases, purchase commitments, or other action pursuant to section 303 of the Act are the most cost-effective, expedient, and practical alternative method for meeting the need.

(b) Consistent with section 303(a)(1) of the Act, the Secretary of Defense shall create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials by supporting feasibility studies for mature mining, beneficiation, and value-added processing projects; by-product and co-product production at existing mining, mine waste reclamation, and other industrial facilities; mining, beneficiation, and value-added processing modernization to increase productivity, environmental sustainability, and workforce safety; and any other such activities authorized under section 303(a)(1) of the Act.

(c) In the execution of projects to create, maintain, protect, expand, or restore sustainable and responsible domestic production capabilities of such strategic and critical materials consistent with section 303(a)(1) of the Act, the Secretary of Defense shall consult with the Secretary of the Interior, the Secretary of Agriculture, the Secretary of Energy, and the heads of other executive departments and agencies (agencies) as appropriate.

(d) Further, pursuant to section 303(a)(7)(B) of the Act, I find that action to expand the domestic production capabilities for such strategic and critical materials is necessary to avert an industrial resource or critical technology item shortfall that would severely impair the national defense capability. Therefore, I waive the requirements of section 303(a)(1)–(a)(6) of the Act for the purpose of expanding the sustainable and responsible domestic mining, beneficiation, and value-added processing of strategic and critical materials necessary for the production of large-capacity batteries for the automotive, e-mobility, and stationary storage sectors.