Oxford US – efforts to decarbonize and de-risk the battery supply chains

This paper examines the challenges of de-risking U.S. supply chains while promoting decarbonization, questioning whether emissions reduction efforts conflict with reducing dependencies on China. It focuses on the Biden administration's policies regarding Li-ion battery supply chains and the complications of electric vehicle subsidies under the Inflation Reduction Act. The adoption of mass-market EVs in the U.S. relies on affordable options, tax credits, and battery price reductions. However, the stringent criteria attached to these incentives may hinder their effectiveness. The Department of Energy aims to balance the risks of reliance on China's battery capacity while addressing national security vulnerabilities. OEMs are facing pressure to adjust their supply chains amidst geopolitical tensions, adding costs and technical challenges. The outcome of the 2024 presidential election may further complicate the situation. The paper highlights the need for a strategic approach to supply chain resilience and energy security amidst the shifting paradigms of energy transition and decarbonization.