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This Week In Climate: The IRA’s impact on electric vehicles

Sunday, August 24th, 2022: In our climate news column, "This Week in Climate", we look at the IRA’s impact on electric vehicles, and how they are making waves in the hills of Nevada and halls of power in Beijing.
Julian Moore
Aug 14, 2022 10 min read
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As the dust settles around the Inflation Reduction Act, the political deal-making that made the bill possible is starting to run head-long into difficult economic and geopolitical realities.

One of the IRA’s biggest presumptive wins for the climate was the extension of a $7,500 credit for electric vehicles. That was no small feat, since West Virginia Senator Joe Machin seemed focused on killing it throughout the tortuous months of negotiations leading up to this week.

Since then, the devil in the details has made itself known. In order to secure Manchin’s approval, Democratic leaders made a few compromises.


Electric vehicles sold in the U.S. will only qualify for the credit if:

  • 40% of the battery materials are sourced from American mines or processors.
  • Battery components are manufactured in the United States
  • Any batteries made with materials from a “foreign entity of concern” will automatically be disqualified from receiving the credit.


On its face, the compromise looks reasonable.

The United States enjoys an abundance of reserves of the metals and materials necessary to meet the exploding demand that will come with a mass scale-up of electric vehicle output.

Nevada is bursting with lithium, Idaho’s “cobalt belt” is still largely untapped, and graphite reserves in Alaska have attracted the attention of at least one mining company, with others sure to follow.

The problem is that in today’s world, the great majority of those materials are sourced from a “foreign entity of concern” called China.

American mining corporations have stated clearly that they will face enormous supply chain challenges in ramping up operations to meet demand, with or without Chinese materials coming into the U.S.

And supply chains aside, the U.S. government is at the peak of a decades-long slowdown in permitting mining operations within its borders.

The result is that Chinese inputs in American EVs are seemingly inevitable, throwing the true impact of EV credits in the air while also casting yet another a stone in China’s direction.


The China Connection

The complications with China come at a particularly bad time. Shortly after Speaker of the House Nancy Pelosi landed in Taiwan last week, China responded by cutting off climate negotiations with the United States.

It is still unclear exactly why Speaker Pelosi went to Taiwan when she did, but it seems an unlikely coincidence that the visit came on the heels of the passage of the CHIPS and Science Act in the U.S. Congress. That bill is designed to boost U.S. production of microchips and presumably reduce American dependence on Taiwan, where no less than 63% of the world’s microchips are currently produced.

It also contains $80 billion for zero-carbon technologies and climate adaptation, a fact that largely flew under the radar among while attention was focused on the Inflation Reduction Act.

In this case, domestic climate policy may have come at the expense of the world’s most important climate cooperation.


The Climate Connection

Complicated as it is, the conversation around the economics and politics of American mining still leaves out the climate.

This week, a historic surge of rainfall in Kentucky fell on a landscape scarred by decades of strip-mining, which multiplied the impact of the storm and played a major role in the ensuing torrent of mud and sludge that devastated local communities.

Strip mining is a method that is about as crude as it sounds. Trees, roots, rocks, earth— all are dug up and displaced to reach the desired materials, leaving little in the way to stop a heavy rain fall from turning into a deluge.

This is exactly the type of mining planned to extract lithium from Nevada’s Thacker Pass, where the density of lithium in ore can be as little as two-tenths of one percent. In a year, that would mean 20 to 30 million tons of earth would be moved for the sake of 60,000 tons of lithium, putting the site on par with the combined ecological impact of several entire coal states.

Activists and indigenous groups have vowed to fight the mines, however those alliances are fraying.

Mining is a necessary evil if the near-term goals of the energy transition are going to be met before the biosphere reaches apocalyptic tipping points. But for the lands and communities that will host the transition, those tipping points may well come sooner.

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The Author

Julian Moore