Columnist Richard Fein: Potholes, roadblocks dead ahead for EVs


Published: 09-24-2023 3:00 PM

It is generally accepted that electric vehicles (EVs) emit much less carbon than gasoline-powered cars. The U.S. government has committed itself to make EVs a part of an overall transition to cleaner energy technology. This is important in the fight against climate change. General Motors and Volvo have committed themselves to stop selling new gasoline-powered vehicles between 2030 and 2035.

There has been some public discussion about the financial cost of that transition, the underlying infrastructure challenges, and the need to design new parts, including tires. Without minimizing the importance of that discussion, it is important to focus on some related matters: access to needed minerals, social inequity, and workers’ rights.

Access to needed minerals

Building electric vehicles, especially batteries, requires minerals including cobalt, lithium and rare earth elements. Moving from fossil fuels to clean energy means shifting from reliance on resources the United States produces, for example oil, to reliance on imported ones. Where are minerals for EV batteries mined?

Critical minerals are found across the world, but most economically viable deposits are found in only a few places. For instance, much of the world’s cobalt is located in the Democratic Republic of the Congo, while lithium is concentrated in South America and Australia.

Processing the minerals is also important. In term of processing cobalt, China has 74% of the global market.

Afghanistan, now ruled by the Taliban, may be a factor in making EVs. The U.S. Defense Department has concluded that the lithium and other minerals buried in Afghanistan might be worth $1 trillion. In fact, the U.S. Geological Survey reported that the magnitude of the underground wealth could make Afghanistan the world’s principal source of lithium.

According to the Washington Post, Chinese companies are aggressively positioning themselves in Afghanistan and, in doing so, further tightening China’s grasp on much of the global supply chain for EV minerals.

In sum, the United States is currently dependent on China and other foreign countries for the raw materials and processing needed for EVs. What about the future?

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The more EVs being built, the more the problem grows. By 2040, demand for lithium could rise 40-fold from 2020 levels, according to the International Energy Agency.

To its credit, the Biden administration launched an initiative to secure a Made in America supply chain for critical minerals, but the road to getting there is problematic.

There are at least 20 significant lithium deposits in the U.S., but there is only one operating mine. Why is that? Let’s look at a sample case: There is a rich lithium deposit in Maine. However, Maine has strict mining and water quality standards. It prohibits digging for metals in open pits larger than 3 acres. There is strong public opposition to new mines, a common occurrence in our country.

In order to have a domestic supply of the minerals needed for EVs, environmental regulations in our country will need to be loosened. That will be a difficult and painful balancing act.

Social inequity: Who can afford to buy an EV?

According to Kelley Blue book data, in July,2023, the average EV transaction price was $53,469. That is more than many families can afford, even with the $3,755 average federal subsidy. At present, owners of EVs are predominantly middle-age, white, and earning more than $100,000 per year.

Prices in 10-15 years in the future are hard to predict. It may be that over time prices will decline. EV prices did drop slightly from 2022 to 2023. On the other hand, if manufacturing is constrained by environmental concerns and demand for EVs grows, it is possible that prices will increase.

For example, the price for the essential mineral lithium carbonate averaged about $11,000 per metric ton in 2016. It has now increased to nearly $62,000 per metric ton.

The legitimate interests of workers

Here are but two of many cases worldwide to consider: A substantial proportion of cobalt is mined in poor countries .Workers, including many children, dig the metal from the earth using only hand tools at great risk to their health and safety.

In our own country, the United Automobile Workers has called on President Biden to do more to protect American workers’ interests amid the shift to electric vehicles. EVs require fewer workers to build than gasoline-powered cars. The UAW is concerned about job losses, the undermining of their wages, and reduced benefits.

As citizens we cannot turn a blind eye to the serious problems a full scale transition to EVs will cause. Fighting climate change is important. Recognizing its inevitable challenges and costs is important too.

Richard Fein holds a master’s degree in political science and an MBA in economics. He can be reached at