Bill to Lower Use of EV Battery Minerals from Foreign Sources

Sen. Gary Peters introduced legislation to reduce the nation's reliance on foreign adversaries, especially China, for the critical minerals used in electric vehicle (EV) batteries and other technologies.

The Intergovernmental Critical Minerals Task Force Act, as the bipartisan legislation is called, would require the Office of Management and Budget to create a task force and appoint representatives from federal agencies to consult with state, local and tribal governments.

According to a press release, the group would be tasked with identifying new opportunities for domestic mining, processing, refining, reusing, and recycling of critical minerals, and how to best tackle national security threats related to America's critical mineral supply chains.

The bill mandates the task force to publish a report on its findings for Congress.

Peters noted that U.S. manufacturing and global economic competitiveness depends on reliable access to minerals. The Michigan Democrat who chairs the Homeland Security and Governmental Affairs Committee emphasized in a statement that “the nation’s dependence on adversarial nations like China for critical minerals poses serious national security and economic threats.”

Sen. Peters stressed that the bill would strengthen the domestic critical minerals supply chain, create well-paying jobs, and keep the U.S. manufacturing sector competitive globally.

Currently, China dominates the global market for processing and refining crucial EV battery materials like lithium and cobalt, making access to battery materials a growing concern for automakers and their suppliers.

The Inflation Reduction Act’s tax credit for new EVs is also tied to domestic sourcing of critical minerals. There is a $3,750 tax credit for EVs with at least 40% of the value of the battery’s critical minerals were extracted or processed:

• In the U.S.
• In a country where the U.S. has a free-trade agreement, or
• From materials that were recycled in North America.

Another $3,750 is available if at least half of the value of the EV’s battery components are made or assembled in North America, notes Automotive News.

The percentages rise gradually and hit a peak of 80% in 2027 for minerals and 100% in 2029 for battery components.

From 2024, cars containing battery parts made by "foreign entities of concern," including Chinese-controlled companies, won't qualify for credits. That disqualifier extends to minerals in 2025.

Originally posted on Auto Dealer Today