Without Africa, Biden’s Energy Policies Are a Win for China

Without Africa, Biden’s Energy Policies Are a Win for China

China’s dominance of the EV value chain begins long before the final assembly of a car or truck.

The state visit last week of Kenya’s President William Ruto—the first White House welcome at that protocol level for an African head of state in nearly sixteen years—and the announcement of the country’s designation as a major non-NATO ally, the first in Sub-Saharan Africa, was a rare moment for the continent. President Biden declared that the United States was “all in on Africa’s future.” However, unless the Biden administration quickly ups its Africa game significantly, its domestic energy policies risk not only enriching America’s top global competitor, the People’s Republic of China, but also entrenching China’s dominance over the exploitation of African natural resources.

Within days of taking office, President Biden invoked “the urgent demands of the climate crisis” to commit the country to “a clean energy revolution that achieves a carbon pollution-free power sector by 2035 and puts the United States on an irreversible path to a net-zero economy by 2050.” Since then, the federal bureaucracy has churned out a cascading series of regulations covering everything from mandating an ever-increasing proportion of energy to be generated from renewable sources and the production of more electric vehicles (EVs) to regulating the efficiency of new kitchen appliances.

Still Boosting China

In March, the Environmental Protection Agency (EPA) finalized a rule establishing new limits on tailpipe emissions which, by progressively limiting the exhaust pollution allowed over time, would effectively require that more than two-thirds of cars and light trucks sold in the United States be EVs or at least hybrids by 2032. As The New York Times noted at the time, while the administration, in a slight concession to automakers, relaxed the pace at which they needed to conform to the new standard until after 2030, the tailpipe rule nonetheless “would transform the American automobile market” since compliant vehicles made up only 7.6 percent of total U.S. car sales last year. 

The challenge for the administration is that, despite the EPA’s claims that the air pollution reductions from the new standards would provide the country with $13 billion in annual health benefits in the aggregate, Americans, as individuals, are not exactly chomping at the bit to swap their conventional vehicles for EVs or hybrids. Despite consumers being eligible for a $7,500 federal tax credit for the purchase of a hybrid or EV, Ford, for example, only sold 24,000 of its all-electric F-150 Lightning pickup trucks in 2023, not even one-sixth of the 150,000 sales the company once projected. In yet another indication that the administration’s push for EVs is not going as well as it had hoped, this past Sunday on CBS’s Face the Nation, host Margaret Brennan pressed Transportation Secretary Pete Buttigieg to explain how former President Trump is “not wrong” about consumer reluctance to buy EVs.

One reason, of course, is cost. According to Cox Automotive, the parent of the authoritative Kelley Blue Book, in April 2024, the average price for EVs was $55,242, compared to $44,989 for gas-powered cars—and that was after Tesla cut prices on its offerings after being knocked off its position as the best-selling EV maker last year by China’s BYD. The extended-range version of the Chinese automaker’s offering to the global mid-to-large luxury sedan market, the Han EV, is priced at about $32,800, while its bestselling model, the Yuan Plus hybrid (exported as the “Atto 3”), prices at just $16,644.

With an eye to members of the United Auto Workers in crucial swing states like Michigan and Pennsylvania, Biden quadrupled tariffs on Chinese EVs to 100 percent two weeks ago, preemptively foreclosing on the bargain option, even though there are hardly any cars manufactured by BYD (or any other Chinese automaker) available in America. However, the move misses a more significant point: China’s dominance of the EV value chain begins long before the final assembly of a car or truck.

BloombergNEF estimates that, in 2023, lithium-ion battery demand across EVs and stationary storage totaled about 950 gigawatt hours (GWh), while global battery manufacturing capacity was about 2,600 GWh, much of which was produced in China. In short, China makes enough batteries to supply all EV manufacturing in the world—and then some. In fact, just one Chinese firm, CATL, controls more than 30 percent of the global EV battery market and has been the top manufacturer for seven years in a row.

In the most optimistic scenario, growing domestic manufacturing capacity to avoid dependence on China in the push to decarbonize would require a precise balancing of subsidies and tariffs. But this simply shifts the competition upstream to the question of access to the critical minerals and other metals that go into batteries and make the energy transition and other advanced technology possible. 

Alas, here too, China is in an advantageous position. The International Energy Agency estimated that the 2050 net-zero emissions goal proclaimed by the European Union Climate Law, as well as in President Biden’s December 2021 executive order, will spike demand for lithium, graphite, cobalt, and nickel thirty-fold over the next twenty years. While the Democratic Republic of the Congo (DRC) accounts for just less than three-fourths of all the cobalt produced in the world, almost all of the metal is then exported to be processed in China, which also processes about 90 percent of the world’s rare earth elements (REEs), 50-70 percent of the lithium and cobalt supply, and 35 percent of the nickel supply.

Back to Africa

As I have argued previously, the Biden administration’s ambition of building a greener economy powered by lower carbon or even carbon-neutral energy systems is only possible if it first secures access to reliable (and copious) supplies of the necessary strategic materials. Otherwise, as a group of national security experts warned in a letter to Biden in the lead-up to the EPA rule’s publication, implementing it before having found an alternative to the Chinese supply-chain dominance would lead to even more dependence on China for critical minerals and manufacturing, and open America to economic manipulation at the whim of its main geopolitical rival.

And that is where Africa comes in. The continent is home to about one-third of the world’s mineral resources, including over half of the global cobalt, manganese, and platinum group reserves. In addition to the cobalt and REEs previously mentioned, a recent U.S. Institute of Peace study noted: 

Gabon, Madagascar, Morocco, and South Africa rank among the top sources of critical minerals for which the United States is 100 percent import reliant. Guinea, Mali, Mozambique, and Zambia also have substantial stores of critical minerals resources. Further, Ghana, Guinea, Mali, Namibia, South Africa, and Tanzania are endowed with critical minerals deemed essential for an energy transition, and the minerals sector already constitutes more than 25 percent of exports for each of these countries.

While China has advantages derived from being long invested in exploiting Africa’s mineral resources, Chinese mining companies have been widely criticized by some African governments and civil society organizations for their importation of labor and other practices. More recently, their exporting of the materials mined on the continent for processing in China has been met with resistance from Africans desirous of capturing more of the value chain as the global energy transition placed a premium on the strategic material.

To be fair, the Biden administration has taken some steps in the right direction. The Memorandum of Understanding, signed at the United States-Africa Leaders Summit at the end of 2022, committed the United States to work with the DRC and Zambia to strengthen the EV value chain. This development has good potential, especially since it was followed up with substantial U.S. and, subsequently, European investment in the Lobito Corridor connecting Angola, the DRC, and Zambia. The corridor not only allows for a shorter and more reliable transportation route from the mineral-rich interior countries to the eponymous Angolan port on the Atlantic via a refurbished and expanded railway but also spurs the buildout of telecom and energy infrastructure. 

More can and needs to be done, including cooperating with Washington’s traditional European and Pacific allies, all of whom, to one degree or another, find themselves in similar straits with respect to their own green energy ambitions. This will, of course, take time and effort, which means that not only must the political will be summoned and resources be adequate for the undertaking identified, but federal mandates—if they are to exist at all—have to be properly structured so as not to exacerbate challenges.

Turning Around

However well-intentioned the Biden administration’s energy policies, including the EPA’s new tailpipe regulation, they represent a dangerous course if they unwittingly cause the United States to become even more dependent on Chinese-dominated supply chains, whether for finished batteries or minerals needed for green technologies. Instead of looking west across the Pacific to China for the wherewithal to develop future U.S. energy and industry, Washington needs to look east across the Atlantic to Africa, where, in partnership with African governments and companies, a more strategic and sustainable path can be blazed.