With a single order, U.S. President Joe Biden has set the stage to try and complete the massive task of shoring up the country's domestic supply chains for semiconductor materials and battery minerals, among others.
Biden signed an executive order on Feb. 24 asking federal agencies to conduct 100-day reviews of potential risks within domestic semiconductor manufacturing, high-capacity battery production and extraction of critical minerals such as rare earth elements. Under the order, the agencies will submit recommendations to the president on addressing these risks, including the location of manufacturing and production assets key to national security.
The order also requests one-year reviews of the country's defense and energy industrial bases. The reviews will be overseen by the Assistant to the President for National Security Affairs and Assistant to the President for Economic Policy within the White House.
"There is nothing, nothing, nothing we have ever failed to achieve if we work together. That's what we decided to do today," Biden said at a same-day signing event.
The order intends to address shortages of foreign-made lithium-ion battery cells and semiconductor materials that have created headaches for U.S. electric vehicle, battery storage and solar suppliers.
California-based Tesla Inc. has seen an impact from the shortages across its electric vehicle and energy businesses, executives said in January. The company has prioritized cell supply and battery pack manufacturing for electric vehicles, leaving its energy storage business unable to keep pace with growing demand among utilities and homeowners.
Enphase Energy Inc., which makes power electronics used primarily in rooftop solar installations and is also based in California, has grappled with semiconductor supply shortages for years.
"We are seeing constraints on a few semiconductor components used in our microinverters," President and CEO Badrinarayanan Kothandaraman told investment analysts on a Feb. 9 earnings call. "Our top priority is to take care of our installers, and our teams are working hard to minimize customer disruption," he said.
The executive order also aims to accomplish a goal former President Donald Trump tried and failed to reach: The establishment of a domestic battery supply chain with investments upstream.
On mineral security specifically, the order cited a previous directive by Trump declaring a national emergency over U.S. reliance on foreign sources for certain metals, including battery materials such as lithium and cobalt. Trump's order led to the expansion of a clean energy loan program to apply to mining projects.
The order received plaudits from representatives of the mining sector including National Mining Association President Rich Nolan.
"The President clearly recognizes the threat and is acting to protect against the exposure that exists in our energy, national security, manufacturing and medical supply chains given our overreliance on imports for the building blocks of these key industries," Nolan said in a same-day emailed statement.