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US and Japan signed a trade agreement on minerals for EV batteries

Despite the harmful effects of deep-sea mining on marine life ecosystems, the U.S. and Japan signed a trade agreement on March 28 to bolster the EV industry and secure the essential minerals required for EV batteries. The deal secured the battery supply chains of both countries and provides Japanese automakers with broader access to the lucrative $7,500 U.S. EV tax credit. According to a senior Biden administration official, the key focus of the agreement is to prevent the imposition of bilateral export restrictions on essential minerals used in EV batteries, such as lithium, nickel, cobalt, graphite and manganese. By doing so, the deal not only ensures a stable supply of these minerals, but also aims to reduce the reliance of both nations on China. The trade agreement takes on added significance as it aligns with the climate-centered Inflation Reduction Act (IRA), which offers $7,500 tax credits for electric vehicle purchases. Minerals-focused trade agreements play a pivotal role to access these credits. The Biden administration views these agreements as a strategic means of opening up access to the tax credits and enhancing the supply chains for critical minerals and their processing. Treasury Secretary Janet Yellen recently highlighted the importance of strengthening the supply chains for critical minerals during her testimony in the House Ways and Means Committee. The trade deal with Japan further solidifies the administration's commitment to this goal. While these mining practices may offer a solution to satisfy the increasing need for metals to meet the growing demand for their use in electric vehicles and renewable energy components, it comes at a steep ecological cost. Visit RoboCars.news for more news related to electric vehicles.