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Why the US must support the electric vehicle supply chain

Why the US must support the electric vehicle supply chain
© Greg Nash

General Motors’ announcement last month that the company will phase out all gas-powered vehicles by 2035, coupled with Ford’s plan to double its electrification investments, are yet another sign that the global transition toward electric vehicles is well underway. Worldwide sales of EVs are anticipated to reach tens of millions per year by 2030, which means we will need just as many lithium-ion EV batteries. 

Who will produce these batteries? And how can we ensure the supply chain will be sustainable?

If the U.S. is not careful, that supply chain will continue to be dominated by foreign sources of manufacturing, exacerbating a current bottleneck of supplies in East Asia. And without greater transparency and adherence to existing responsible mining standards, communities in major mineral-producing countries like the Democratic Republic of Congo and Chile may continue to experience harmful local impacts. These range from child labor abuses in artisanal cobalt mines and water supply depletion from lithium extraction to corruption and revenue loss at multiple levels of government. 

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These impacts worsen global inequalities and provide fodder for EV critics, who conveniently gloss over the similar — and often worse — problems plaguing oil and gas production, detracting from the clear environmental benefits of EVs.

But the economic opportunity for countries — and companies — that can advance a sustainable supply chain is massive. By some estimates, production of graphite, lithium, and cobalt will need to grow by over 450 percent by 2050 to meet global EV targets. The U.S. has a strong interest in ensuring that as much of this supply chain as possible is based domestically. A more geographically diversified supply chain will guard against the supply and price shocks we’ve seen in the oil and gas context over the decades, while more domestic production will ensure greater adherence to environmental and human rights standards, given the U.S.’s relatively strong history of regulation and enforcement.

Although the battery supply chain will likely lean heavily on imported minerals for the foreseeable future, the U.S. has opportunities to bolster domestic production and reduce its dependence on foreign production. Mineral supplies for EV batteries in the U.S. are ample. Lithium deposits are present in states like Nevada and potentially in great quantities in Southern California’s Salton Sea. While battery manufacturers are scrambling to phase out cobalt, energy-dense lithium is not likely to be replaced anytime soon. 

Furthermore, the U.S. has the manufacturing capability not only to mine the raw materials but refine and process them for use in battery packs. That local production can mean good jobs in the parts of our country that need them most, along with reduced shipping emissions from delivering these supplies to vehicle production facilities in places like California and Nevada (Tesla), Tennessee (Nissan), and Michigan and Ohio (General Motors).

But beyond boosting the domestic supply chain, automakers and EV advocates have an incentive to ensure that battery production is more sustainable worldwide. That means addressing all risks associated with EV batteries, including those related to human rights, governance, equity, local environmental impacts, and supply reliability. Without greater sustainability, the EV transition could be plagued by shortages, price fluctuations and negative consumer perceptions. 

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Fortunately, advocates and industry have worked hard to develop responsible mining standards, such as guidance from the Organization for Economic Cooperation and Development, the Responsible Minerals Initiative and Extractive Industries Transparency Initiative. Yet these admirable initiatives can suffer from a lack of coordination, limiting adherence and international oversight. The industry will need stronger mechanisms for neutral and reliable information sharing, leveraging automakers’ experience and capacity in traceability and sustainability, and new incentives for compliance with agreed-upon standards. Meanwhile, enhanced U.S. diplomacy and foreign aid can bolster the capacity of governments and observers in mineral producing countries and promote strong standards for transparency and accountability.

Beyond improving existing standards, the U.S. needs to begin planning for a massive battery reuse and recycling deployment. As batteries begin to degrade in vehicles, consumers can swap them out for newer ones, leading to a potential tidal wave of still-serviceable, inexpensive used batteries that can be repurposed for utility-scale grid storage, stationary backup power and myriad other applications. Eventually, they can be recycled, leading to downward demand for newly mined supplies and potentially creating local jobs in the process. But this process will require careful planning and community outreach, incentives and ultimately supportive legislation and regulation, as we’ve seen with successful recycling efforts launched for other products.

Electric vehicles are here to stay, which is good news for the economy and the environment. They are a much cleaner option than internal combustion engines — even factoring in electricity emissions (which are decreasing with renewables), they represent significant savings on greenhouse gases per mile compared to gas engines. 

But the gains will be much greater if U.S. and state policy makers seize the opportunity to plan for a more sustainable, domestic supply chain for the batteries that will soon be powering most of our transportation needs.

Ethan Elkind is the director of the Climate Program at UC Berkeley Law’s Center for Law, Energy and the Environment (CLEE) and co-author of the report, "Sustainable Drive, Sustainable Supply: Priorities to Improve the Electric Vehicle Battery Supply Chain.”