The transition from gasoline to electric vehicles is largely dependent on the supply chain for batteries and their materials.
According to EVAdoption.com, U.S. automakers are struggling with domestic shortages of lithium and other key minerals as they try to meet demand for EVs.
The biggest shortage is in domestic lithium production. According to the World Economic Forum, Australia accounts for half of the 100,000 tonnes of lithium produced worldwide. Chile and China are next. The US lags far behind with less than 1,000 tonnes of lithium annually.
The same is true for other important minerals used in batteries. The U.S. depends on countries like Russia and the Democratic Republic of the Congo, and U.S. mining has stagnated.
As the US EV market grows, the federal government and industry players are looking to build a domestic minerals supply chain.
The federal government is accelerating production plans with generous incentives. The 2021 Infrastructure Act allocated him more than $7 billion to strengthen his chain of battery supply in the United States.
The 2022 Inflation Reduction Act added a tax credit of up to $7,500 for EV purchases, as long as the majority of battery minerals come from North America or a US free trade partner.
By 2024, 40% of critical minerals must be extracted or processed in countries with free trade agreements in force in the United States or from recycled materials in North America. This will make him jump to 80% by 2027.
Aspiring domestic lithium producers say the legislation is a tangible step toward President Joe Biden’s goal of EVs accounting for half of new car sales by 2030.
“The Inflation Reduction Act underscored Biden’s policies,” said Jonathan Evans, CEO of Lithium Americas in Vancouver, British Columbia. Players across the supply chain are already integrated.”
Some are not convinced that the Biden administration’s EV industrial policy will solidify the U.S. position in the industry because of the sheer size and complexity of the supply chain.
“Taking the power battery industry alone, it covers positive and negative electrode materials, separators, electrolytes, etc. The United States alone cannot establish a huge industrial supply chain in a short period of time. even in relation to countries that have free trade agreements with the United States,” wrote Maya Xiao, an analyst at the Interact Analysis research firm, in a recent report.
This article was optimized by the SEO Team at Clickworks
SEO