Electric car: “We need to build reliable supply lines with the USA”

By Jorge Arguello

Argentine Ambassador to the United States

The accelerated process of electrification of transportation in the United States, driven by public policies oriented towards sustainability and environmental protection, is generating significant investments by mining and automotive companies to achieve ambitious production goals.

Companies like General Motors, Ford and BMW, with whom we maintain a constant dialogue in Washington DC, are planning a large-scale manufacturing transformation that faces several challenges. A major challenge is to secure the supply of lithium and other critical minerals required for the production of vehicle batteries. The disparity between supply and demand led to an increase in prices and has raised concerns about the sufficient availability of this mineral.

In this sense, our country plays a crucial role in this process: we are already one of the main suppliers of lithium in the United States and we have the ability to tenfold our production, going from the current 37 thousand tons per year to over 350 thousand tons in 2030.

Investments made by US companies and companies from other countries, especially in Catamarca, Jujuy and Salta, have a significant impact on production. The short-term potential for job creation and value creation in Argentina is enormous.

However, the recent enactment of the Inflation Reduction Act by President Joe Biden in August 2022 has generated concern both in auto companies, battery makers and mining companies, as well as in the Argentine government and other supplier countries of the States United.

This legislation establishes incentives for the production of electric vehicles and their components, including direct loans frome Up to $7,500 for new EV purchases and $4,000 for used EVsbut on condition that part of the minerals contained in the batteries comes from extraction or processing carried out in the United States or in countries with which the United States has free trade agreements.

Both governments have expressed interest in addressing this issue, which has been reflected in meetings and events organized by the Argentine embassy in Washington DC, in cooperation with the State Department and other agencies. The issue has also been addressed in high-level exchanges between governments in recent months, including during the meeting between Presidents Alberto Fernández and Joseph Biden on March 29.

This same week, the Secretary of International Economic Relations, Cecilia Todesca, had an intense agenda of work in the United States, with both the public and private sectors, to address this and other issues.

An enriching dialogue has been developed with the Department of Commerce, the Department of State, the Office of the Trade Representative (USTR), the main think tanks in Washington and with companies such as Albemarle, Livent, Allkem, Rivian, Lilac, Río Tinto , Triangular lithium, among others.

Similarly, in the first meeting of the Minerals Security Partnership (MSP) initiative, on May 17, Secretary of Mines, Fernanda Avila, presented investment projects in Argentina before officials from 13 countries and more than 40 global companies. The MSP is a US promoted area that brings together countries with investment potential in critical minerals and leading global companies with the goal to consolidate value chains and build reliable supply lines.

In the same line of work, we brought together key US government agencies last year and 41 companies interested in strategic mining, with the three governors of the disputed provinces: Raúl Jalil, Gustavo Saénz and Gerardo Morales. The face-to-face meeting with the provincial leaders, at the State Department headquarters, was fundamental in clarifying various axes of the investment process in those territories.

The aim is to consolidate this strategic alliance in the field of electromobility. U.S. private sector investment and innovation, combined with the strength of our science-tech ecosystem, will enable us to add value and advance the sophisticated battery manufacturing chain, from lithium carbonate to lithium hydroxide, from cathode materials to the cells.

Our daily dialogue with government and businesses in the United States aims to deepen this articulation and generate the maximum possible benefit for Argentina in the context of this historic opportunity.