As the need to meaningfully address climate change grows by the day, we also must ensure consistent access to the critical materials that underpin our efforts. This is why Lithium Americas commends Congress and the Biden Administration for the passage of the historic Inflation Reduction Act (IRA). By combining climate change policy with provisions to bolster U.S. industrial policy, the IRA signals a clear commitment to reducing emissions while strengthening economic security. At a time when the United States must urgently invest in critical minerals development and processing facilities to support the clean energy transition, this legislation inspires bold action to foster the reliable supply of lithium—a key resource to unlocking a brighter future.

Lithium’s essential role as a component of electric vehicle batteries and large-scale renewable energy storage underscores how much of a hurdle we are facing in the U.S. when it comes to the widening supply-demand imbalance. By 2030, global demand is expected to quadruple and grow to more than 2 million tonnes per year. Roughly one-sixth of this demand will come from the U.S.. Unfortunately, U.S. production capacity currently stands at just 5,000 tons—just one percent of global supply. China, which has a relatively smaller share of lithium deposits than both South America and Australia, has built robust processing capability. As a result of this investment, China produces over 60 percent of global lithium supplies.

This foreign dependence counterintuitively generates significant carbon emissions by shipping battery components across a complicated global supply chain, while connecting us to economies that lack the safety, labor, and environmental standards we expect domestically. Furthermore, we pass up the economic benefits gained across the battery supply chain—such as competitive and fulfilling jobs, or tax generation—to foreign jurisdictions.

We’re excited about the work taking place at our Thacker Pass project in northern Nevada and the role we hope to play in developing and enabling a growing domestic battery industry. Thacker Pass, the largest known lithium resource in the United States, will alone increase the nation’s supply of lithium by as much as 16 times when in operation—enough to supply more than one million electric vehicles with batteries annually. We’re focused on being a productive partner to both the nation’s clean energy ambitions and the local communities affected by Thacker Pass. This is why we’ve spent years of foundational work on responsible development and outlined a plan that will provide community and economic benefits. We continue to place a strong emphasis on providing family-supporting jobs, producing lithium responsibly with low impact to the environment, and designing the project to minimize carbon and water consumption.

While Thacker Pass will make a big dent in our supply hurdle, there is much more that needs to be done. Full production capacity of Thacker Pass will not be enough to meet forecasted U.S. consumption of approximately 350,000 tonnes per year in 2030. More domestic production is necessary.

The passage of the Inflation Reduction Act marks a turning point for the U.S., showing that we are serious about fighting climate change and creating opportunities for players across the North American battery industry to rise to the occasion. We congratulate the Biden Administration on this achievement, and we are ready to roll up our sleeves and get to work.