The U.S. and Japan Reach an Agreement on Electric Vehicle Batteries

The United States and Japan have reached a trade agreement on electric vehicle battery minerals, which will help to strengthen their battery supply chains and give Japanese automakers greater access to the new $7,500 US EV tax credit.

Under the deal, the two countries have agreed not to implement bilateral export restrictions on minerals crucial for EV batteries, including lithium, nickel, cobalt, graphite, and manganese. The agreement aims to reduce reliance on China for these materials and promote collaboration to combat “non-market policies and practices” in the sector. The deal also seeks to promote labor rights and recycling in the battery mineral supply chains of both countries.

The US Treasury is expected to define sourcing requirements for EV tax subsidies by the end of the week. The agreement will be reviewed every two years.