If the U.S. is to significantly grow its production of electric vehicles (EVs), it’s going to need a robust domestic supply chain that includes critical metals and minerals. The Biden administration has previously provided billions in funding made available through the Infrastructure Investment and Jobs Act (IIJA, also known as the Bipartisan Infrastructure Law) to help establish new clean-energy industries, an approach it is repeating with EV battery manufacturing and its goal of having EVs account for half of all new-car sales by 2030. In today’s RBN blog, we look at the $3.5 billion set aside to fund investments in the EV battery supply chain and increase domestic manufacturing.
When it comes to EV sales, the U.S. is way behind China, which accounts for about half of global sales. China’s adoption of EVs is aided by the fact it also holds a dominant position in EV manufacturing, including batteries. China produces three-quarters of all lithium-ion batteries and has the capacity to produce about 70% of cathodes and 85% of anodes — two key battery components. (More on those below.) In addition, China is home to more than half of the world’s lithium, cobalt and graphite processing capacity. The U.S. has been concentrating its efforts on developing a more reliable supply chain for materials ranging from semiconductor chips used in cars to the materials used to make batteries, but the U.S. still lacks lithium and other key components.
As we noted in our Tell It Like It Is series, extraordinary volumes of special metals and minerals will be required to move away from gasoline-powered cars, SUVs and pickups. According to an analysis by the International Energy Agency (IEA), it takes about 6X more of these materials to produce an EV than to build a vehicle powered by a conventional internal combustion engine (ICE). Among other things, EVs require significant amounts of copper, nickel and graphite, and even though EVs make up a fraction of the overall vehicles on the road, demand for many key minerals and metals is already beginning to outstrip supply.
Figure 1. Key Tax Provisions for EVs Under the Inflation Reduction Act. Source: Electrification Coalition
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