U.S. – Japan Critical Mineral Agreement

The sourcing of critical minerals has been a topic of focus for the automotive and associated industries recently, especially pertaining to the minerals used in the production of batteries for electric vehicles (EV) that could be subject to a potential $7,500 tax credit under the Inflation Reduction Act. For vehicles to qualify for this tax credit, EV batteries are required to have at least 40% of their minerals sourced domestically or from free-trade partners. The U.S. has begun expanding domestic critical mineral processing in response to the provisions by enacting the Defense Production Act to bolster domestic output of critical minerals to reduce the reliance on China for supply, and awarding funding for domestic critical mineral processing.