Menu

Advertisement

• Policy
• Energy & Climate
• Critical minerals

Tesla, Ford, Toyota jockey for Australia’s critical minerals

Matthew CranstonUnited States correspondent

Oct 7, 2022 – 4.09pm

Save

Share

Detroit, Michigan | Major American car manufacturers have been in discussions with Australian government officials about co-investing in critical mineral processing here.

Companies such as Tesla and Ford want to hasten the development of critical minerals production in Australia so they can line up sufficient supply of materials such as lithium and cobalt, which are essential for electric vehicles.

EV sales in America have been rising by about 50 per cent per year for the past four years and now account for more than 4 per cent of the 15 million passenger car sales per year.

However, the big car manufacturers can’t keep up. This week Tesla reported below consensus car sales figures in the US representing a $US1 billion ($1.6 billion) shortfall and management blamed that on bottlenecks in supply chains.

AFR Weekend has learnt that General Motors, Tesla, Ford and Toyota have all had lengthy calls with Australian government officials about the potential for co-investment in critical mineral processing. The car companies have declined to comment about how far they will go in terms of investment.

Under the Biden administration’s Inflation Reduction Act, EV buyers only get a tax credit if at least 40 per cent of the EV inputs come from free trade agreement partner countries such as Australia. This percentage lifts to 80 per cent by 2028.e

The problem is that China processes 70 per cent of the world’s lithium and the US wants to be industrially more self-reliant in case the adversarial relationship between the two chokes supply.

It is understood almost all of Tesla’s supply chain executives participated in the recent discussions with the Australian government about securing critical minerals processing.

US Commerce Secretary Gina Raimondo committed in March this year to help finance Australian critical minerals projects through America’s export financing arms.

The CEOs of six Australian critical minerals companies – Iluka, Australian Strategic Minerals, Cobalt Blue, Lynas, RZ Resources and VHM - visited Washington, DC in March to discuss how the two countries could speed up investment in the critical minerals supply chain.

Analysis from the International Monetary Fund suggests Australia is in pole position to benefit from a sixfold increase in demand for so-called “critical minerals” worth $US12.9 trillion ($17.6 trillion) over the next two decades.