White House efforts to spur domestic battery manufacturing have a problem: Some critical raw materials are only found abroad, and China controls much of the supply, Axios‘ Joann Muller and Jael Holzman report.
Why it matters: The provenance of materials used in EV production — including lithium, nickel, cobalt and graphite — has a huge effect on tax credits designed to spur EV adoption.
Zoom in: Consumers can earn up to $7,500 in federal tax credits on EV purchases — but only when buying cars that meet certain sourcing requirements.
- Climate law subsidies exclude EVs with components from “foreign entities of concern” — a category that’s hazy but will likely include China.
Reality check: Many minerals essential to EV battery chemistries are primarily mined and processed in China or by companies within China’s sphere of influence.
- China is poised to control a third of global lithium supply by 2025.
- It’s also home to one of the largest natural battery graphite resources and the only country currently mining such material in large quantities.
