The Korean automobile industry including Hyundai Motor Group and the Korean battery industry have submitted a letter of opinion in order to ask the U.S. government to allow the use of key minerals for electric vehicle (EV) batteries produced in China for a limited period of time.
Hyundai Motor Group said in the letter submitted to the U.S. government on Jan. 18 that it is impractical to immediately remove foreign entities of concern (FEOCs) from the electric vehicle battery supply chain for certain key minerals, according to sources in the automotive industry on Jan. 22.
“Other countries are unlikely to be able to replace China in the short term,” Hyundai pointed out while noting that China refined and produced 100 percent of the world’s spherical graphite and 69 percent of the world’s synthetic graphite as of 2022. The Korean automaker suggested introducing a list of key minerals that can be used in the manufacture of batteries and battery components regardless of their origin for a limited period of time, and including graphite in this list.
Hyundai Motor Group also requested the introduction of a de minimis threshold to exempt certain key minerals from the FEOC rule if their value is less than a certain amount. Hyundai proposed a de minimis threshold of 10 percent, meaning that key minerals that account for less than 10 percent of the total value of key minerals used in batteries would not be subject to the FEOC rule.
The Korean automotive group also requested that the U.S. government quickly announce a list of battery materials that are not subject to the FEOC regulation due to the impossibility of tracing their origins.
Korea’s three major battery companies –- LG Energy Solution, SK on and Samsung SDI -- and the Korea Battery Industry Association made similar comments. SK on said it would take at least three to four years to build a supply chain to replace Chinese graphite, and even then it would be difficult to meet all North American demand for batteries so it requested a two-year delay in the FEOC rule to January 2027. LG Energy Solution argued that it is very difficult for battery manufacturers to verify graphite’s countries of origin.