The Fuse

The United States Lags On Critical EV Minerals Development

by Alex Adams | @alexjhadams | November 25, 2019

As the electric vehicle (EV) market continues to mature, the question of where to source all the materials required to produce the vast amount of EV batteries needed has been repeatedly raised—shining a spotlight on the United States’ critical mineral and rare earths supply chain as a result.

Outlined in its Made in China 2025 plan, Beijing has made no secret of its intention to capture the entire EV supply chain from minerals to markets as a strategic priority. Ownership of emerging industries with global significance, China reasons, will allow it to undermine and potentially usurp American authority on the world stage by stealing the technological lead from the United States.

To do this, China has been scaling up not only its manufacturing but also its markets. Of the 70 lithium ion battery megafactories currently under construction worldwide, 46 are based in China. Just five are planned for the United States. Two of the top five global EV brands are Chinese, with Nissan, BMW and Tesla rounding out the rest. There are 421,000 electric buses on the roads in China, compared to 300 in the United States.

If the United States hopes to keep pace with China, action must be taken as soon as possible. Simon Moores of Benchmark Mineral Intelligence told the Senate Committee on Energy and Natural Resources in February that “We are in the midst of a global battery arms race in which the U.S. is presently a bystander.” For the minerals required to build EV batteries, Benchmark notes, the United States depends on imports for 92 percent of its lithium supply, 100 percent of its cobalt, 59 percent of its nickel and 100 percent of its graphite.

At a RealClear Politics event held last week on critical minerals, Minerals: The Overlooked Foundation of Our Future, Sen. Lisa Murkowski (R-AK) said this trend can be reversed, but “it has to come with a prioritization by an administration, a prioritization by the Congress, a prioritization by the industry,” adding that “we need to be able to provide industry again with that level of certainty to provide them with just a little bit of help when it comes to the permitting process.”

Speaking at the same event, SAFE President and CEO Robbie Diamond said the discussions in Washington about minerals are not connecting those resources to the markets, stating that the federal government has taken “baby steps” while China has taken “huge leaps.”

“I think, until we have a comprehensive plan that’s not just about permitting or saying that we need the minerals, but a plan that shows the use of those minerals in the U.S. as a market, we will not develop the supply chain to provide enough certainty to weather the ups and downs of the capital market quarter to quarter,” Diamond added in an interview.

A potentially lucrative source of the materials required could also be the ocean floor, according to reporting from CBS’ 60 Minutes. The program noted the minerals on the seafloor, containing all the metals required for EV battery manufacturing, could be worth up to $16 trillion. The richest area for these minerals can be found in the Clarion Clipperton Zone, for which 19 countries have licenses. China has more licenses than anyone else—and even Cuba and Tonga have stakes—but the United States currently has none.

The EV market is still in its infancy worldwide, but presents a tremendous opportunity for the United States to bolster its economic and national security by providing a scalable alternative to oil. But in order to seize control of our transportation future, the United States must scale up its supply chain and avoid a dependence on countries like China for raw materials or finished products.