Electric batteries and critical materials dependency: a geopolitical analysis of the USA and the European Union

Abstract

This article estimates the import dependency of the USA and the European Union on the raw materials needed to produce batteries that equip Electric Vehicles. The dependency is very high on many critical materials and on batteries themselves. In a geopolitical context marked by the rising US-China rivalry and new cold wars, it has prompted the USA and the EU to support local mining and processing of critical materials in an attempt to recover their strategic autonomy. They have also deployed raw material diplomacy to secure access to resource-rich countries by favouring allied countries whenever possible. Both decisions are difficult to implement, and progress is slow. China's dominance over the electric battery is difficult to circumscribe, especially since the USA, with the Inflation Reduction Act (IRA), does not hesitate to defend its interests at the expense of the EU. The result is a politicisation of business, forcing global production networks to align themselves with the opposing blocs.