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The U.S. is playing catch-up in the EV battery market, says Biden energy adviser

MICHEL MARTIN, HOST:

If you're in the market for a new car, then you've probably already started digging into those new car guides and paying attention to those glitzy ads. And if you haven't already gone there, you're probably asking yourself, do I want to go electric or hybrid? The Biden administration would like you to. The administration wants at least half of new car sales to be electric in 10 years. To make that happen, car manufacturers need batteries, lots of them. But here's the thing - China has a tight grip on the materials and production needed to make those batteries. According to the International Energy Agency, China made 75% of the world's lithium ion batteries in 2021. The U.S. made only 7%. This is yet another area where the U.S. and China are competing on the global stage.

So we thought this would be a good time to ask how the U.S. can make progress on electric cars and renewable energy when China dominates the market. We called Amos Hochstein for that. He's the special presidential coordinator for global infrastructure and energy security. In that role, he advises President Biden on energy as a national security matter, and his portfolio runs across agencies. So we thought he'd be a good person to talk about this. And he's with us now. Mr. Hochstein, welcome. Thank you so much for joining us.

AMOS HOCHSTEIN: It's great to be here, Michel. Really great to have this conversation.

MARTIN: Well, thanks for that. So to start us off, is the U.S. in a race with China to acquire the materials for these car batteries?

HOCHSTEIN: I think we're in a race, not necessarily with China, but we're in a race to ensure that we have for the United States a diversified sourcing of these batteries and solar. So it's not just about the battery. So if you think about it, the way you just presented it, Michel, we have - the battery, in it, has a number of components. And the car has even more components, and they all come from places like sub-Saharan Africa, from South and Central America, Southeast Asia. And we have to source those.

So one thing President Biden wants to do is make more of those batteries here at home. We want to do more mining here at home, but we know we can't mine in the United States for everything that we need because we're such a big economy. And it's not just about the United States. We don't want China to control the supply for the whole world, just like we didn't want Russia to control the supply of energy for its neighbors. So we have to learn from the mistakes of the Russia war and now implement that here and make sure that when you buy that electric vehicle or you install that solar panel, that it's not controlled by one country.

MARTIN: So a fact sheet released by the White House last month said, quote, "the U.S. is increasingly dependent on foreign sources for many of the processed versions of these minerals. Globally, China controls most of the market for processing and refining for cobalt, lithium, rare earths and other critical minerals," end quote. As I said, this is from the White House.

HOCHSTEIN: Yeah.

MARTIN: How did we get to this point where China essentially has control over this market and the U.S. is playing catch up?

HOCHSTEIN: Over the last 10 years, China has invested in acquiring mines in primarily Africa and some in South America. So they own a lot of mining. They own a lot of the refining and processing of those materials. So when they come out of the ground, you got to turn them into battery-grade material. And then they want to build the batteries. And we wanted things cheap, so we were willing to buy whatever was on the market at the lowest cost. China then reduced the cost, subsidizing it. We bought the cheap stuff from them, and our own industries went out of business.

MARTIN: Why, though? I understand how this happened. You've just told us, but why did this happen? It seems that there has been a movement in the U.S., an interest in renewable energy for some time. There's certainly a constituency for it. Or, you know, I guess you've told us what happened, but I'm interested in why this happened.

HOCHSTEIN: The why - it's not as much as the constituency, but maybe even to the contrary. What the Chinese wanted to do was to take away our industry. We even sued them under the Obama administration and accused them of anti-dumping, meaning that they were selling product for less than what they was costing them to produce. And so because we didn't think ahead of what is this doing to our industry, they essentially took us out of business. And we didn't really care because we think about things in a free market. We always talk about, we want this to be in a free market. And one actor in this free market was acting exactly the opposite. They were subsidizing and pouring money into it and using their influence around the world to take over the supply chain. And once we lost the supply chain, we lost the industry. So if in 2010, we were the dominant solar power manufacturer, today, we barely even exist. But that's all about to change.

MARTIN: So before we let you go, how do you want consumers to think about this? I want to loop back to where we started our conversation. You know, when people are thinking about their own purchases for their own household, they're generally thinking about like, what can I afford? And what will serve my needs? Your job is to help the country, help the president, help the country think about energy, not just as a sort of a tool for lifestyle, but also as a matter of national security, right? So how do you want consumers to think about this? And do you think that they are, given, you know, all the things that we've talked about?

HOCHSTEIN: So a couple of things. I think you raised an excellent point. First, I hope that consumers are shopping for electric and hybrid vehicles and are finding affordable options. And I think the more interest we have, the more we can bring down the price. But I think consumers should also be interested in the national security aspect. And consumers should also tell their members of Congress, tell their elected officials, voice their concerns that they would rather buy things and inquire about, is this coming from China? Is there any bad labor practices? Does this come from slave labor origins?

How do I make sure that I want them to buy these products but also tell their members of Congress, we want to buy an electric vehicle and know that it did not come from certain regions or provinces that are exploiting their workers in order to get this. And I think that dual message will help us get to what I think is - we need - what we need, a bipartisan approach that says, this is not about fossil fuels versus renewables. The world is going towards an electric future.

MARTIN: That's Amos Hochstein. He is a special adviser to President Biden on global infrastructure and energy security. Amos Hochstein, thanks so much for talking with us.

HOCHSTEIN: Thank you. It was a pleasure. Transcript provided by NPR, Copyright NPR.