Chinese firms’ dominance of rare earth and precious metals supply chains extends so far that the makers of electronic vehicles (EVs) cannot promote their products aggressively in global markets without benefiting Beijing.
Though the Biden administration may be aware of how far the United States lags behind China when it comes to lithium and cobalt production, and has made some belated efforts on the research and development front, these efforts are too little, too late. That’s the view of Christopher Tang, faculty director of the UCLA Center for Global Management and chair of the university’s business administration department.
As long as the imbalance persists, EV manufacturers, whether they like it or not, are helping consolidate supply chains that enrich Chinese state-owned firms, Mr. Tang said. This situation is unlikely to change soon without a significantly redoubled campaign to onshore precious metals production.
“We need to be realistic. We want to push for EVs, but China is pushing most EV batteries for the rest of the world,” Mr. Tang told The Epoch Times.
Ford Motor Company, for example, on April 4 announced its decision to postpone the launches of EVs in Canada and Tennessee in deference to demand for hybrid vehicles. Even so, Ford and other domestic and foreign automakers are making highly aggressive efforts to market their EVs, and to persuade as many people as possible that EVs are the future of the auto industry.
Chevrolet’s Blazer EV and Silverado EV Work Truck, Ford’s Lightning F-150 EV and Mustang Mach-E, Lucid’s Air, Lexus’s RZ, Nissan’s Ariya, and Kia’s EV6 GT are among the vehicles that visitors to the Javits Center have test-ridden during the show.
EVs are becoming ever more visible, though still dogged by controversy around their safety and sourcing. Automakers promote new models in spite of the fact that EV battery production worldwide draws heavily on lithium-ion, cobalt, and other substances whose mining, processing, and distribution are largely the domain of Chinese firms.
Beijing’s Control
Kristin Vekasi, a professor of political science at the University of Maine, estimates that China oversees 50–60 percent of global rare-earth mining, along with 80–90 percent of processing and refining and as much as 70 percent of manufacturing.As dire as the situation may be, Mr. Tang does not find it surprising some U.S. automaker are partnering with Chinese firms in state-of-the-art auto production.
The partnership between Ford and various Chinese entities has been growing steadily for years. In November 2017, Ford and Chinese EV maker Zotye Auto signed a joint venture agreement to launch Zotye Ford Automobile Co. Ltd., to design, manufacture, and sell EVs in China.
In January 2022, Ford and Jiangling Motors Corporation launched a joint venture, Jiangling Ford Automobile Technology (Shanghai) Co. Ltd., to facilitate the flow of technology and products between the two automakers.
In August 2023, Ford formed yet another joint venture with Chongqing Changan Automobile Co. Ltd. with a specific focus on bolstering the production and sale of Ford’s Mustang Mach-E automated vehicle, Mr. Tang noted.
These moves on the part of the third-biggest U.S. automaker reflect the reality of China’s preeminence in the EV field, its control of rare-earth and precious metals mining and production, and the fact America and aligned nations are ill-prepared to compete with their current infrastructure and regulations, said Mr. Tang.
“If we want to expedite EV adoptions, there is simply no fast way to get the lithium for batteries available to us right now. In the immediate future, there is no other way” that does not involve any intersection with Chinese supply chains, he said.
While efforts are underway to locate and capitalize on lithium deposits in Nevada and some areas of North Carolina, it will take time to make mining operations in those states at all competitive with those in China—particularly given the fierce opposition of ecological activists to any such mining, Mr. Tang continued.
Biden Weighs In
The administration of President Joe Biden has made some efforts to cultivate a domestic industry, Mr. Tang conceded.The Bipartisan Infrastructure Law allocated $5 billion to the development and rollout of a network of high-speed EV battery chargers on America’s roads. The goal is to have at least 500,000 chargers in place by 2030.
Mr. Tang also pointed to the Department of Energy’s June 12, 2023, announcement of more than $192 million of new funding for several initiatives aimed at onshoring battery production. These include establishing a battery research and development consortium and sponsoring the recycling of batteries from consumer products.
In spite of these initiatives, Mr. Tang sees a significant lag with regard not only to infrastructure but the expertise needed to be competitive.
“The United States has a lot of rare earth, but to actually extract these kinds of minerals from the rocks requires a great deal of water, processing, and refining. Better late than never, but it takes time, there’s a learning curve,” he said.
As things stand now, Chinese firms can easily produce EVs in the $10,000 price level. These may not be the best in terms of quality or safety, but from a cost standpoint, they are highly competitive, Mr. Tang said. Tesla seeks to introduce a Model 2 that is cheaper, but for the time being, consumers’ options in the domestic market are limited mostly to EVs in the price range of Ford’s, which run from about $35,000 to as high as $80,000, depending on the model, he said.
Further Concerns
U.S. automakers marketing their products aggressively overlook a spate of legal, moral, and ethical problems, and these go beyond reliance on supply chains based in China. Other regions rich in rare earths and precious metals have their own political and human rights issues. Moreover, EVs place unprecedented demands on a U.S. power grid not designed with their ubiquitous use in mind.That’s the view of Charles Trzcinka, chair of the finance department at Indiana University’s Kelley School of Business.
“Those who promote electric vehicles almost always ignore two important costs. First, their impact on the power grid. We simply will not be able to generate enough power to run the EVs and everything else that environmentalists want to run electrically,” Mr. Trzcinka told The Epoch Times.
The second concern he identified has to do with reliance on supply chains in a part of the world where human rights issues are endemic, but the region in question is not China. Mining in Africa to procure cobalt for batteries involves the forced labor of some 400,000 children, Mr. Trzcinka noted.
On top of these issues, those pushing the use of EVs are guilty of a peculiar form of hubris, Mr. Trzcinka believes.
“There is a larger point than just the costs. This administration, and many in government, want to make decisions for us. They don’t want us to decide which technology should power our cars, cook our food, or heat our houses. They arrogantly think that they know better than each of us what the right mix is,” said Mr. Trzcinka.
Mr. Trczinka said he envisioned an alternative arrangement where the government would impose a carbon tax and let various technologies compete.
“Hybrid cars use smaller, longer-lasting batteries and have a much longer range than EVs. Why isn’t natural gas, of which we have an abundance, a way to run cars?” he asked, recalling a job he once held running a natural gas forklift in a factory four decades ago.
“We also had battery-operated forklifts, and everyone wanted the natural gas machines. The battery-operated lifts were always charging. This hasn’t changed. EVs are still always charging,” said Mr. Trzcinka.
The automakers mentioned in this article did not reply by press time to a request for comment.
