automotive industry

SAFE Urges Bipartisan, Coordinated Policy To Lead New Tech in Auto Industry and Protect Against …

Washington, D.C., Sept. 25, 2020 (GLOBE NEWSWIRE) — A bipartisan, federal response is required for the United States to compete with China’s ownership of the next generation of transportation, according to The Commanding Heights Of Global Transportation, a new report from SAFE which emphasizes the need to compete with China as a national security priority.

 

Government policies worldwide prioritizing lower-carbon economies, in addition to hundreds of billions of dollars spent and pledged by authorities and automakers on non-petroleum fuels, have made a transition to connected, autonomous, shared and electric vehicles a certainty. The Chinese government prioritized leadership in these new technologies as part of its Made In China 2025 strategy, through which it seeks to gain greater global authority and reap the significant economic rewards.

 

“For decades, the U.S. economy and American national security has suffered from our nation’s dependence on an oil market controlled by countries that do not share our strategic priorities. The transition to electric, connected vehicles provides our country with an opportunity to finally create a transportation system that works in our own national interest. But if we do not lead this shift, we instead risk becoming dependent on China for our future transportation needs,” said Admiral Dennis Blair (Ret.), former Director of National Intelligence and Commander-in-Chief, U.S. Pacific Command, and Chairman of SAFE.

 

“National security has always been a bipartisan concern on Capitol Hill, and we must assess the clear security concerns inherent in Chinese ownership of our transportation future. We have a brief window to mobilize our considerable resources to build a robust transportation sector free from Chinese control. If we miss that window, we risk jeopardizing our auto and truck industry and the 10 million U.S. jobs the auto industry supports. We also risk a future driven by Chinese technology and the policy decisions of our largest strategic rival in the 21st century,” said Gen. James T. Conway (Ret.), 34th Commandant of the U.S. Marine Corps and Co-Chair of the Energy Security Leadership Council, a project of SAFE.

 

SAFE’s latest paper, The Commanding Heights Of Global Transportation, found China controls nearly 70 percent of global electric vehicle (EV) battery manufacturing capacity, while North America has less than 10 percent. This vast control includes:

 

  • Direct or indirect control of 70 percent of the world’s lithium supply, 61 percent of the cathodes and 83 percent of the anodes used in batteries.
  • Ownership of 80 percent of the rare earths supply needed for U.S. weapons systems and EVs, and control over the processing of this supply.
  • China produces roughly 75 percent of the permanent magnets that use rare earths, another critical component for EV motors
  • In May 2020, 107 of the 142 lithium-ion battery megafactories under construction worldwide are, or will be, located in China. Just nine are planned for the United States.
  • More than twice as many EVs sold cumulatively in China compared to the United States. 421,000 of the 425,000 electric buses worldwide are on Chinese roads.

 

The Commanding Heights Of Global Transportation contains comprehensive recommendations that enable the United States to compete with China by:

 

  • Supporting the advanced fuel vehicle market and domestic manufacturing
    • Reforming the federal tax credit for EVs and expanding a tax credit for medium- and heavy-duty EVs.
    • Tax credits and funding that fosters the retooling, expansion and establishment of advanced transportation manufacturing.
  • Developing a critical minerals supply chain that is not controlled by China
    • Includes creating a domestic rare earths processing cooperative to ensure uninterrupted supply of the minerals required for U.S. high-tech and defense system applications.
    • Recycling policies for EV batteries to create a closed loop resource supply chain.
  • Advancing next-generation transportation technology
    • To compete with Chinese companies, allowances for deploying novel design autonomous vehicles (AVs) on public roads must be expanded from 2,500 to 100,000 per manufacturer as long as they are as safe as current vehicles.
    • A clear pathway for regulatory reform and certainty at the federal level, as developers currently must contend with a patchwork of regulations at the state level, while China can make rules by fiat.
  • Combating predatory economic practices
    • Includes issuing an antitrust waiver to allow U.S. automakers to work together with global industry to address issues related to doing business in China and supply chain issues.

 

“The 21st century will be defined by the relationship between the United States and China, and the strategic and economic promises of transportation technologies, including EVs and AVs, are already at its center. To truly compete against China’s ownership of these critical supply chains and new technology, we need to rehabilitate and transform our entire industrial ecosystem from minerals to markets. We must build a robust mining, processing, and battery manufacturing base, as we make the U.S. a leading market to drive demand and this supply chain,” said SAFE President and CEO Robbie Diamond.

 

The comprehensive recommendations also include:

  • Working with allies to diversify supplies of minerals not readily available in the United States;
  • Expanding the Advanced Technology Vehicles Manufacturing Loan Program to include associated components such as batteries, anodes and cathodes;
  • Preserving the 5.9 GHz band (the “Safety Band”) for vehicle connectivity;
  • Investing in nationwide advanced fuel vehicle charging and refueling infrastructure; and
  • Strengthening alliances with international partners to respond jointly to China when needed.

 

Read the report.

Alex Adams Securing America’s Future Energy 202-461-2374 aadams@secureenergy.org

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