Business & Economy

Japan, US strike deal on materials for electric vehicles

Tokyo, Mar 28 (EFE).- Japan and the United States have reached a trade agreement to facilitate the supply of minerals used in the manufacture of electric vehicles (EVs), the Japanese Ministry of Industry said Tuesday.

The pact, once formally signed, will allow Japan to benefit from the Inflation Reduction Act, ratified by the US in August last year, under which a certain amount of critical minerals in the batteries of EVs must be sourced or processed either domestically or from free trade agreement partners.

The recent agreement underlines that Japan will be treated as a preferred trading partner for minerals such as lithium, nickel, cobalt, graphite and manganese used in the manufacture of batteries for EVs.

“The agreement is aimed at building resilient supply chains in cooperation with the United States, as well as like-minded nations, to secure critical minerals indispensable to the production of EV batteries,” Japanese Industry Minister Yasutoshi Nishimura said at a press conference.

The minister said that other details including benefits for the Japanese industry, as well as the date of signing the pact, would be made public soon by the US Treasury Department.

Japan, South Korea and several EU countries had voiced their protests to the US for being excluded from its program to support the domestic electric vehicle industry.

Tokyo sent a formal letter in November to the US government requesting for a review of the provisions so that Japanese companies could participate in this program.

The pact announced Tuesday is aimed at reducing the high dependence on raw materials for electric batteries from China, while envisaging collaboration to control investments from third countries in their respective supply chains. EFE


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