Global car makers plan to spend more than half a trillion dollars on the electric vehicle (EV) revolution in the next few years.
The industry is rapidly transforming and the stakes are enormous.
The auto manufacturing of tomorrow is now up for grabs.
But while U.S. car makers are rolling out new EV models by the week—and announcing huge investments in battery manufacturing facilities — the United States is not leading the electrification race.
Rather, we’re being lapped.
China — not the U.S. — is far ahead, thanks to startling control of the EV supply chain, particularly the production and processing of minerals that make lithium-ion batteries possible.
And while China has made mining and mineral processing a foundational piece of its energy policy, the U.S. has been asleep at the wheel.
President Joe Biden has set lofty goals for EV deployment over the next decade, but the domestic mineral supply chain required for such an effort doesn’t exist.
And the issue is not a lack of resources — it’s policy.
There is an alarming disconnect between the mineral demand that U.S. energy policy is driving and the policies needed to meet it.
For example, fully electrifying the U.S. car fleet would require increases of 127%, 245%, and 114% of respective global nickel, lithium, and cobalt production from 2019.
Failure to stand up a secure, domestic supply chain — supported by policies that allow investment to quickly respond to demand signals — risks three troubling developments.
First, the U.S. is poised to trade the geopolitics of the oil barrel — and reliance on OPEC — for the geopolitics of the battery and a supply chain controlled by China. U.S. mineral import reliance is at alarming levels, having doubled in just two decades.
Allowing China to potentially weaponize our mineral insecurity is a mistake we must avoid.
Second, failure to ramp up mineral production and processing could derail U.S. and global climate efforts.
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.
Third, this production shortfall will not hit all nations and auto industries equally. Because China holds such a dominant position in the supply chain, 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.
As recent reports from two leading policy institutes in Washington — the Atlantic Council and Wilson Center — have identified, there’s no getting the U.S. to the EV future that the Biden administration and U.S. automakers desire without getting serious about domestic mining.
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.
Rich Nolan is president and CEO of the National Mining Association.