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Tariffs on critical minerals and their role in the electric vehicle value chain

Blog post Published on 01/08/2024
By Theresa Carpenter, Samuel Munyaneza and Ralf Peters at UN Trade and Development (UNCTAD)

This blog post is based on the original special topic “Tariffs on critical minerals in the electric vehicle value chain” of the World Tariff Profiles 2024.

The shift towards clean energy technologies and electric vehicles (EVs) is gaining momentum as the world seeks to combat climate change. This transition requires increased use of critical minerals, such as cobalt, graphite and lithium, which are essential components of EV batteries. However, the use of escalating tariffs in EV production chains could be a factor preventing developing economies from diversifying their exports and moving up the value chain.
Tariffs on critical minerals and their role in the electric vehicle value chain
Clean energy technologies rely heavily on a variety of minerals. For example, solar power extensively uses copper, aluminium, cadmium, tellurium and selenium, while wind power requires copper, rare earth elements, chromium, zinc and aluminium. The production of EVs and their batteries requires aluminium, copper, cobalt, graphite, nickel, lithium, manganese and rare earth elements.

As a result of the global shift toward clean energy technologies and EVs, the demand for certain critical minerals, such as cobalt, graphite and lithium (minerals that are plentiful in developing economies), is expected to grow significantly. Projections suggest a fivefold increase in demand for these minerals by 2050 due to their intensive use in new energy technologies.

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