President Joe Biden this week raised tariffs on China’s massive green technology sector, which includes electric vehicles, batteries, solar cells and some essential minerals, touting them as a way to protect American workers.
But Gene Berdichevsky saw a gaping hole. The White House has decided to delay tariffs on graphite, a key metal in electric vehicle lithium-ion batteries that helps them store energy, for two years. China mines and processes the vast majority of the world’s supply, according to U.S. federal data.
“If our policy is that China is not playing on a level playing field and therefore we are going to use tools to level them up, then we should do it in a way that actually results in the outcome that we want, which is “that is, developing domestic battery supply chains,” Berdichevsky said Tuesday during a dinner with reporters in Washington, DC.
Berdichevsky is the CEO of Sila, a next-generation battery materials startup that uses silicon instead of graphite. The company’s technology makes lithium-ion batteries lighter than those currently available on the market, and the company claims it can store 20% more energy, or up to 100 additional kilometers for some electric vehicles. Berdichevsky, an early Tesla employee, said he saw a future in which electric vehicles could charge in 10 minutes, rivaling a stop at the gas station.
Sila opened a factory last year in Moses Lake, Washington, with a $100 million grant from the U.S. Department of Energy. The company aims to make enough battery materials to power 200,000 electric vehicles by 2026, and Mercedes-Benz is already a customer.
Manufacturing new technology in the United States is challenging for several reasons. In Sila’s case, the company must be large enough to meet demand from large automakers, Berdichevsky said. It requires billions of dollars, but it’s difficult to raise money between the venture capital and private equity stages – a gap he described as the “missing link.” Additionally, the United States is slow to transform its infrastructure, including power grids and electric vehicle charging, which would boost demand for indigenous green technologies. At the same time, there is a risk that another company will copy the technology and try to compete.
The White House is sending a disappointing signal to Sila investors today by exempting Chinese graphite from tariffs and other policies aimed at distracting automakers from supplying batteries and critical minerals from China, it said. Berdichevsky.
He added that if the White House imposed tariffs on graphite, “the market would react and say, ‘Oh, there’s this new technology that can replace graphite made in the United States – let me invest in that.’ .
New trade barriers would make electric vehicles sold in the United States more expensive, Berdichevsky added. But it would send a strong signal “to get rid of Chinese graphite now, not in two years or more.”
The White House did not respond to a request for comment. But a senior Biden administration official said on a call with reporters that some tariffs would take effect in 2026 to help transition battery supply chains. Domestic production is starting to come online, but not quickly enough to minimize market disruption.
An Environmental Defense Fund analysis found that enough U.S. battery production has been announced to supply all electric vehicles expected to be sold in 2030. However, these batteries can still source graphite from China until 2027 at least, under the Biden administration’s policy.
Beyond graphite, Biden’s other tariffs on Chinese green technologies are mostly symbolic. Existing tariffs already keep Chinese electric vehicles out of the U.S. market, while cheap solar panels arrive mainly from Southeast Asia to circumvent trade barriers. But higher battery taxes this year could hurt U.S. automakers such as Ford and Tesla, which import from China.
businessinsider
