-Procurement of more than 40% of core minerals from countries that have signed FTAs with North America and the United States, and subsidy of more than 50% of battery parts
-Korean Cathode and Cathode materials also contain core minerals… Including Japanese-EU minerals, competition intensifies
On the 31st (local time), the U.S. Treasury Department announced detailed guidelines for regulating minerals in electric vehicle batteries under the Inflation Reduction Act (IRA).
As a result, from April 18, electric vehicles that used more than 40% of ‘core minerals’ extracted and processed in North America or countries that signed free trade agreements (FTAs) with the United States, or more than 50% of ‘battery parts’ were procured from North America. The current subsidy of 7,500 dollars (approximately 9.78 million won) will continue to be paid to If this condition is not met, even an electric car made in North America can receive only $3,750, half of the current subsidy.
Cathode and cathode materials produced in Korea, which has an FTA with the United States, are also included in the list of core minerals. In addition, in the case of core minerals, materials imported from countries that have not signed an FTA with the United States will be included in the subsidies even if they are processed in Korea, which has an FTA with the United States.
Domestic companies account for more than 50% of the market for cathode and anode materials used in ternary (NCM) batteries, which are installed in most of the world’s high-end electric vehicles. Ternary batteries are made of nickel, cobalt, and manganese. For this reason, it has been paying attention to whether electric vehicle batteries using Korean cathode and anode materials will be included in the subsidies. From the point of view of the domestic industry, the worst was avoided. However, in order to receive subsidies or tax credits, individual companies still have to negotiate with the US government.
In addition, in this announcement, the United States also recognized Japan and the European Union, which recently concluded a mineral agreement, as ‘FTA signatories’. Japan is a producer of cathode and anode materials comparable to Korea, and the EU is also promoting production expansion. As a result, competition in major countries surrounding the electric vehicle battery market is expected to intensify.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.