EU Boosts Raw Material Investments for Electric Vehicle Transition
The European Union is set to introduce a new regulation aimed at boosting investments in raw material extraction and processing. This move comes as current investments by Fidelity Investments and other financial institutions fall short of meeting the increasing demand for these minerals, driven in part by the shift towards electric vehicles (EVs).
Electric vehicles require significantly more minerals than conventional cars - over 200 kilograms compared to around 40 kilograms. This surge in demand, coupled with insufficient current investments, has prompted the EU to propose a regulation that reduces investment risks and encourages collaboration across the supply chain in the raw materials industry.
The regulation seeks to foster strategic partnerships with reliable third countries to secure raw material supplies. While the specific countries are not explicitly listed, the EU intends to expand partnerships with reliable partners in Europe and other continents to support their economic development and build resilient supply chains for critical raw materials. Additionally, the regulation aims to avoid excessive requirements and duplicate circularity provisions to protect intellectual property and reduce regulatory conflicts.
The EU Critical Raw Materials Act, as urged by EU automotive suppliers, should incentivize investment and public funding for R&D in circularity, design for circularity, and material substitution. By promoting circularity, the regulation aims to ensure a secure and resilient supply of raw materials for the automotive industry, thereby supporting the transition to electric vehicles, as part of the investment basics.
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