The Inflation Reduction Act (IRA) has some car troubles. One of President Joe Biden’s major initiatives, the law was intended to foster activities that are both good for the economy and green. As such, it contains stipulations about the manufacturing of EVs—particularly that their batteries come from local sources or free-trade partners. But there are some issues with the availability of critical minerals that meet the “local” criteria and some vagueness on important terminology, according to a recent paper.
The IRA was signed into law in August of last year. It includes a provision that gives tax credits to producers that use critical minerals that come from the US or some of its close trade partners. In particular, to get the credits, an electric vehicle—which needs to be fully electric—would need to have a battery in which 80 percent of the market value of its critical minerals is sourced from within the US. Alternatively, this benchmark could be reached using minerals sourced from free-trade partners, or the minerals could hail from elsewhere but be processed in the US.
This is an increase over the requirements (40 percent) for receiving previous incentives. In theory, purchasing one of the vehicles eligible for a tax credit would be more affordable for many consumers.
“I see the motivations there are well-founded. We want to have a secure, environmentally and socially responsible supply of critical minerals as we move to decarbonize,” Jennifer Dunn, one of the paper’s authors and an associate professor of chemical and biological engineering at Northwestern University, told Ars.
However, “it would be hard” to source the aluminum, cobalt, graphite, lithium, manganese, and nickel—the critical elements the paper focuses on—in a way that would meet the IRA’s criteria in the next four years, she said. Dunn and her colleagues wanted to dig into whether meeting the IRA’s stipulations would be within reach of manufacturers by 2027 and whether there are consequences of these standards being set based on the market value of the minerals as opposed to something like weight.
To examine these questions, the team reviewed the IRA’s vehicle requirements to get these tax credits. They then took data from the International Energy Agency and various other sources on how many consumers will want to buy vehicles in 2027. This number landed between 1 and 2 million.
From there, the researchers looked at where the materials needed for those million-plus vehicles would come from in the US using United States Geographical Survey data. From this source, they also looked at the market price for the critical elements over five years (from 2022 backward) and got a sense of how much each element is produced domestically and how much is imported from free-trade partners. They then used the Greenhouse gases, Regulated Emissions, and Energy use in Technologies Model—a lifecycle assessment tool that includes data on vehicle component fabrication—to calculate which types of minerals, and in what amounts, are needed for nickel cobalt aluminum cathode batteries, lithium iron phosphate batteries, and nickel cobalt manganese batteries.