President Joe Biden’s headlong rush into transitioning the country to electric vehicles (EVs) has hit a roadblock with working through the supply chain controlled by China.
That’s the word from a new Axios report, which noted that the EV tax credits slammed into an issue that is difficult to work around. “Some critical raw materials are only found abroad, and China controls much of the supply.”
Biden’s so-called Inflation Reduction Act supplied thousands of dollars in federal tax credits to purchasers of EVs manufactured in the U.S., Mexico, and Canada. However, neither of the three nations controls the supply chain for critical raw materials for batteries.
That brings in Communist China. Beijing dominates the supply of graphite, lithium, and cobalt. Each of these is crucial for manufacturing the high-tech batteries needed to fuel EVs and fulfill Biden’s green agenda.
To qualify for tax credits, "Made in America" rules require minerals in EVs/batteries to be produced in the US or a country with which the US has a free trade agreement.
The US & partners don't produce nearly enough to make this work, writes @cullenhendrix.https://t.co/iDgAWBt8zJ
— Peterson Institute (@PIIE) April 13, 2023
Enter the tax credits enacted by the administration.
The concept was to put the high cost of EVs more into the reach of average Americans. After all, if the country is going to completely ditch gas-powered vehicles sooner rather than later, prices must drop drastically for everyday citizens to afford them.
The White House envisioned federal tax credits up to $7,500 on EV purchases. However, they limited the funding to only vehicles bought that meet certain specific sourcing requirements. In other words — not from China.
And while reducing dependence on Communist China is a laudable goal that few reasonable people would argue with, there’s a hitch. China is the source of both the mining and processing of minerals critical to the all-important battery technology that goes into every EV.
These vehicles are completely dependent on their batteries to function in normal driving conditions. As batteries increase in efficiency and affordability, so will EVs. But they are still beholden to either China or companies within the Chinese Communist Party’s sphere of influence.
Beijing is the only large-scale miner of graphite. And by 2025 it will control a full third of the globe’s lithium supply. And while lithium and other minerals exist in the U.S., there are several challenges to extracting them for battery production.
They are expensive and time-consuming to mine, and leftists are dead set against virtually any mining operation. Environmentalists who come out in force to promote EVs will simultaneously oppose any efforts to extract critical minerals on U.S. soil. And therein lies the problem.