The Future of Electric Vehicles and Critical Minerals
The global shift towards renewable energy technologies and electric vehicles (EVs) has increased the demand for critical minerals such as cobalt, graphite, lithium, manganese, nickel, and rare earths. However, meeting this demand is not a simple task. EVs require six times the amount of minerals compared to internal combustion engine vehicles, and if the world aims to achieve net-zero goals by 2050, the mineral demand for EVs and battery storage needs to grow at least 30 times by 2040.
Sourcing and Processing Critical Minerals
To address the growing demand for critical minerals, it is crucial to establish reliable sources and secure processing capabilities. The United States, with its goal of achieving 50% EV sales share by 2030, faces challenges in domestic production and import reliance. Out of the 35 minerals classified as critical, the U.S. falls short in domestic production of 14 and is more than 50% import-reliant for 31. Currently, China dominates the market for critical minerals and rare earths, accounting for over 70% of global EV battery production capacity.
Initiatives and Partnerships
The U.S. government has initiated landmark programs and partnerships to support the domestic production and safe import of critical minerals. Initiatives like the Inflation Reduction Act, Bipartisan Infrastructure Law, CHIPS and Science Act, and Minerals Security Partnership aim to facilitate a domestic boom in EV and battery manufacturing. Under the Bipartisan Infrastructure Law, the U.S. Department of Energy (DOE) has provided $6 billion to support domestic battery material processing, manufacturing, and recycling. Additionally, the Buy America requirements encourage domestic production and reduce import reliance.
Regulations and Standards
The Internal Revenue Service (IRS) released new revenue procedures in December 2023 to update the 30D clean vehicle credit. Starting from January 1, 2025, vehicles will only be eligible for the clean vehicle credit if their batteries and critical minerals meet certain criteria. The IRS requires qualified manufacturers to establish a compliant-battery ledger and track their anticipated supply of batteries that are compliant with regulations. The federal government is still determining the criteria for labeling foreign entities of concern (FEOCs), but proposed guidance from the DOE identifies China, Russia, North Korea, and Iran as “covered nations” that will be excluded.
Challenges and Opportunities
While these regulations and standards have good intentions, meeting them will require significant changes in the operations of EV and battery manufacturers. It is expected that the focus will shift from light-duty vehicles to medium- and heavy-duty vehicles in the near future. It is essential for manufacturers to understand these regulations, align with the long-term strategic goals of the U.S. government, and ensure the safe and secure utilization of critical minerals.
Navigating the Regulations and Policies
If your fleet, firm, agency, or organization needs assistance in understanding and complying with these regulations and policies, GNA, a TRC Company, is here to help. As North America’s leading clean transportation and energy consulting firm, our team can provide strategic guidance and support in navigating the evolving landscape of clean transportation. Contact us to schedule a consultation and explore your options.
Contact GNA, a TRC Company: Contact Us
Read More of this Story at www.act-news.com – 2024-01-08 14:26:59
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