Recent calls for some sort of protectionist measures to safeguard the nascent Western electric vehicle battery industry have been dismissed by executives of First Cobalt and Standard Lithium.

Speaking at a Kallanish Power Materials webinar on 26 May, ceos Trent Mell and Robert Mintak said measures such as tariffs and other trade barriers would negatively impact the sector.

They agree that the pandemic has highlighted supply concerns the industry may face relying on huge Chinese supply, particularly with rare earths and cobalt. However, when questioned whether protectionism would be effective to safeguard the European and North American markets, they replied: “There’s no industry to protect today.”

“You have the big names in the EV space that would be impacted by not being able to have access to supply. So until the industry is actually not in its infancy – we’re not even in our infancy yet – there’s nothing to protect at the moment,” says Mintak.  

Mell acknowledges Westerners may face a supply risk from well-established Asian players, but that governments should be ready to respond appropriately. He notes that carbon border tax measures planned in Europe and Canada may be the right approach, looking at the carbon footprint of the battery materials and recycling content requirements. Europe is looking into a 12% recycled content in batteries in 2025.

At the same time, the First Cobalt’s ceo also noted that a 30% tariff on Chinese cobalt sulphate imports implemented by President Donald Trump has given the US manufacturers a “huge competitive advantage.”

The key may be in the inverse to protectionism - incentives for localised supply, Mintak suggests.

“Without curtailing access to markets, but instead incentivising through tax credits or other mechanisms that stimulate localisation...I think that would be the best or most sustainable approach for policymakers as opposed to tariffs until the industry has been at least gone through its first generation of development," he says.

Some European companies and politicians have called on the EU and the UK government to ensure “a little bit of protectionism” to limit Chinese investment in Europe and its supply chain.