Staff Reports
Life indeed finds a way, and so does the free market economy, despite President Joe Biden's attempts to intervene in the automotive industry. Biden's push for widespread adoption of electric vehicles (EVs) has encountered a significant hurdle, ironically stemming from the very system he aims to replace.
As reported by The Wall Street Journal, prices for minerals crucial for EV batteries have surged, prompting producers to scale back production. This disruption poses a challenge to Biden's plan and raises concerns about potential shortages, hindering the transition away from gas-powered cars.
not quite as advertised by Biden…
Biden's Electric Vehicle Efforts Run Into Unexpected Roadblock: 'This Situation Is a Bit Dangerous' (https://t.co/a02RgyhleV) pic.twitter.com/XOr8qKT5hj— Dandina (@realdandina) November 22, 2023
Anthony Milewski, CEO of Nickel 28, a battery metals investment company, expressed the reality: "The mines aren't going to get built. We should be building those mines now, and we're not."
Biden's ambitious target was to have 50% of all new vehicle sales in the U.S. be EVs by 2030. However, in the third quarter of the current year, only about 8% of newly purchased cars were electric. Challenges such as local opposition, environmental concerns, and bureaucratic hurdles already impede new mining projects.
The demand for minerals like lithium, cobalt, and nickel is projected to outpace supply in the coming years. Yet, with current mineral prices at a low, producers lack the motivation to expand their capacity.
While decreasing mineral prices might make EV batteries more affordable and contribute to the accessibility of electric vehicles, it also diminishes the incentive for producers to increase their operations. The timeline from mineral discovery to production is lengthy, further complicating the situation.
However, history has shown that the free market has a way of overcoming challenges. In this instance, falling prices may eventually encourage producers to expand operations, fostering increased demand for EVs and subsequently raising both vehicle and mineral prices.
Despite Biden's efforts to exert control, it appears that the market will ultimately prevail. Life, in this case, finds a way, and the free market adapts to the evolving landscape.
