Hyundai Urges U.S. Government for More Time on Chinese Minerals in Electric Vehicles
For now, Hyundai Motor Group has officially requested that the U.S. government consider including certain raw materials for electric vehicle batteries sourced from China in the Inflation Reduction Act (IRA) subsidy.
Last December, the U.S. government categorically designated all companies in China as Foreign Entities of Concern (FEOCs), effectively barring electric vehicle manufacturers from obtaining battery materials from China and other foreign adversaries.
As per the U.S. official gazette dated the 21st (local time), Hyundai Motor Group, in an official statement submitted to the U.S. government on the 18th, argued that “immediately excluding Foreign Entities of Concern (FEOC) from the electric vehicle battery supply chain is not a practical approach.”
Consequently, to qualify for the U.S. government’s IRA electric vehicle subsidy, battery components must not be sourced from FEOCs starting this year, and critical minerals for batteries must not be procured from FEOCs beginning in 2025.
Following the implementation of this regulation, the number of car models eligible for electric vehicle subsidies in the U.S. has dwindled from 43 at the end of the previous year to just 19 this year, with Hyundai Motor Group having no eligible car models since April of last year.
Hyundai Motor has pointed out that “it’s highly unlikely for other nations to replace China swiftly,” given that China is the world’s leading graphite producer and exporter, refining over 90% of the world’s graphite, which is a crucial component used in virtually all-electric vehicle battery anodes.
They have called for the introduction of a “new list of key minerals applicable to battery and battery component manufacturing, regardless of origin” for a limited time and have specifically requested the inclusion of graphite in this list.
Battery manufacturers like LG Energy Solution, SK On, and Samsung SDI, along with the Korea Battery Industry Association, have also raised concerns regarding the challenges associated with the FEOC regulation.
The Korean government has lent its support to the industry by submitting an official statement. It has urged the U.S. government to clarify the FEOC regulation for better comprehension by companies and to introduce measures that will facilitate the adaptation of companies to this new regulation, taking into account the challenges they face and their plans to diversify the global battery supply chain.