In a recent op-ed, National Mining Association president and CEO Rich Nolan argues that while the United States still has a shot at winning the EV revolution, it is currently not only not in the lead, but is rather “being lapped.”
In the lead – not surprisingly to any of ARPN’s followers — is China, which jockeyed for pole position in the EV race a long time ago and has since attained a startling level of “control of the EV supply chain, particularly the production and processing of minerals that make lithium-ion batteries possible.”
The Biden Administration’s ambitious goals to electrify the U.S. vehicle fleet are well known – and consistent with recent global pledges to reduce vehicle CO2 emissions. However, as Nolan points out, there is an “alarming disconnect between the mineral demand that U.S. energy policy is driving and the policies needed to meet it,” adding that “fully electrifying the U.S. car fleet would require increases of 127 percent, 245 percent, and 114 percent of total respective global nickel, lithium, and cobalt production from 2019.”
Failing to establish a comprehensive and robust domestic supply chain for the materials underpinning the sought-after shift to net carbon zero, writes Nolan, risks three troubling developments:
- The U.S. might trade “the geopolitics of the oil barrel — and reliance on OPEC — for the geopolitics of the battery and a supply chain controlled by China.” With import dependence for metals and minerals already at “alarming levels(…) [a]llowing China to potentially weaponize our mineral insecurity is a mistake we must avoid.”
- U.S. and global climate efforts could be derailed: “Battery material shortfalls by 2030 could mean sharply rising battery prices and curtailed EV deployment that makes the impact of today’s semiconductor shortage and its effect on the auto market seem tame. By 2030, as many as 35 million EVs that otherwise would be on the world’s roads won’t exist due to a lack of the materials needed to produce them.”
- Not all nations would be equally hit by this production shortfall “[b]ecause China holds such a dominant position in the supply chain.” As such, “Chinese automakers will gain access to materials that U.S. manufacturers won’t. The competitiveness of the U.S. auto industry and the millions of jobs it supports hang in the balance.”
The challenge is clear, and awareness of the issue has been growing. However, charting a path to success is complicated by a persisting “Not-in-my-Backyard (NIMBY)” sentiment and the notion that we can recycle, substitute, and “friend-shore” our way out of the problem, as we pointed out in a recent post.
Ultimately, the only viable solution is a comprehensive “all-of-the-above” approach that acknowledges that the above-referenced approaches are all parts of the solution — but they must be complemented by support for a strong and sustainable domestic mining and processing infrastructure. The sooner stakeholders come to terms with this reality, the more likely we are to succeed.
As Nolan concludes:
“The U.S. can win the EV revolution, produce the emissions-free vehicles essential to climate action, and ensure the auto jobs of tomorrow are American jobs, but we must make mining policy the foundation of this effort. There’s not a moment to lose.”