$174 billion EV plan lacks critical minerals fix

From $15 billion to bolster clean energy research to incentives aimed at encouraging Americans to buy electric vehicles, the Biden administration's proposed $174 billion investment in the United States EV industry is a once-in-a-generation strategy that is missing a key piece – a plan to secure the minerals needed to manufacture these vehicles and the batteries that go in them.

In a new fact sheet that outlines its plan to supercharge U.S. transportation and manufacturing, the Biden administration says America is falling way behind China when it comes to e-mobility.

"Today, the U.S. market share of plug-in electric vehicle sales is only one-third that of the Chinese EV market. And in 2020, China had approximately 800,000 public charging points compared to just 100,000 in the U.S.," according to the fact sheet on the EV portion of the $2 trillion American Jobs Plan. "President Biden believes it is time for this to change and for the U.S. to lead in EV manufacturing, infrastructure, deployment, and innovation."

The massive jobs plan, however, does not address the fact that the U.S. is heavily dependent on foreign countries, especially China, for the critical minerals and metals that go into EVs and the lithium-ion batteries that power them.

According to a recent report by the International Energy Agency, "The Role of Critical Minerals in Clean Energy Transitions," a typical EV requires six times the mineral inputs of a conventional internal combustion engine car.

While on the surface, EVs are made up of the same steel, aluminum, polymers, and other materials that are used to build standard ICE vehicles, the batteries that power them and the motors that drive them require minerals and metals that were not previously mined at the massive scale needed for the electric mobility revolution.

America's already heavy reliance on foreign countries for these materials, coupled with enormous global competition to secure adequate supplies, could create a problem for Biden's EV aspirations.

The U.S. depends on foreign countries for more than 50% of its supply of 28 of the 35 minerals deemed critical to America's economic and national security, including 100% import-reliant for 14 of them. China is the leading supplier of 22 of the minerals for which the U.S. is net import reliant.

The rare earths that go into EV motors, along with the graphite and manganese in lithium-ion batteries, are among the critical minerals for which the U.S. are fully import reliant – more than 80% of the U.S. supply of rare earth metals and 100% of the coated spherical graphite used in lithium batteries was supplied by China during 2020.

Most of the U.S. supply of cobalt, another important battery metal, originated in the Democratic Republic of Congo (DRC).

This dependency, however, is more about domestic policies than availability of critical minerals in American soil.

"Despite being home to some of the world's richest mineral reserves and abundant supplies of steelmaking metallurgical coal, we continue to source the raw materials required for America's infrastructure and manufacturing from other countries," said National Mining Association President and CEO Rich Nolan. "If policymakers want to create high-paying jobs and support economic security while reshoring the nation's industrial base, made-in-America infrastructure should begin with American mining."

The heavy reliance on imports from China and others is not unique to the U.S.

For example, the European Union gets roughly 98% of its rare earths from China and 68% of its cobalt from the DRC.

The European Union forecasts that the EU will consume 56 times more lithium, 14 times more cobalt, 13 times more graphite, and 12 times more of the rare earth element dysprosium in 2050 than it does today.

The European Commission has launched an aggressive action plan to ensure that the EU can meet this rapidly growing need for the raw materials going into EVs, renewable energy, and other technologies.

"A secure and sustainable supply of raw materials is a prerequisite for a resilient economy," said European Commission Vice President for Interinstitutional Relations and Foresight Maroš Šefčovič.

While the U.S. has not addressed critical minerals supplies as directly as its European counterpart, Secretary of Energy Jennifer Granholm understands that a domestic supply of these critical raw materials is a key to America's successful transition to a carbon-free future.

"America is in a race against economic competitors like China to own the EV market – and the supply chains for critical materials like lithium and cobalt will determine whether we win or lose," she said earlier this year. "If we want to achieve a 100% carbon-free economy by 2050, we have to create our own supply of these materials, including alternatives here at home in America. And we must scale up new American industries that will create millions of good-paying union jobs to do it."

This understanding of the need for critical minerals being fed into the front end of the EV supply chain makes it all the more surprising that a $174 billion investment to "re-establish U.S. leadership in electric vehicles and batteries" does not directly address the availability of the raw materials needed to build this vision.

The proposal, however, does set aside $15 billion for the Department of Energy, which is seeking solutions that will bolster existing efforts to increase the availability of critical materials.

While most of this DOE funding will go into research and development of batteries and other climate-related technologies, some will likely go into investigating potential domestic supplies of rare earths and other critical minerals.

The department recently awarded $19 million into transforming old coal mining regions from Appalachia to Alaska to new domestic sources for rare earths and other critical minerals vital to electric vehicles, renewable energy, and other technologies.

"The very same fossil fuel communities that have powered our nation for decades can be at the forefront of the clean energy economy by producing the critical minerals needed to build electric vehicles, wind turbines, and so much more," said Granholm. "By building clean energy products here at home, we're securing the supply chain for the innovative solutions needed to reach net-zero carbon emissions by 2050 – all while creating good-paying jobs in all parts of America."

Despite the scale of the EV aspirations outlined by President Biden during a May 18 speech at the Ford Rouge Electric Vehicle Center in Detroit, much larger investments in domestic and reliable sources of the critical minerals will likely be required to steer U.S. mineral dependence away from China – the country he hopes to overtake with the $174 billion proposal.

Author Bio

Shane Lasley, Metal Tech News

With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.

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