US EV tax credit expiration reshapes electric vehicle market

US EV

US EV tax credit expiration after 15 years is reshaping vehicle affordability and demand across the US auto market. The US EV tax credit supported sales of models like the Tesla Model Y and Chevrolet Equinox EV. Now the US EV tax credit has ended, leaving buyers with higher upfront costs and manufacturers with greater policy uncertainty.

US EV tax credit expiration driven by politics and fiscal push

The US EV tax credit began in 2008 as a bipartisan tool to jump-start early EV adoption. It later expanded under the Inflation Reduction Act, which tied eligibility to US-made vehicles and domestic supply chains. However, Republican lawmakers and oil interests increasingly opposed the subsidy, arguing it distorted markets and threatened future gasoline demand.

As a result, the latest tax and energy law under president Donald Trump removed the incentive from 30 September. Lawmakers framed the US EV tax credit expiration as a way to save more than $190bn over ten years. The move reflects a broader rollback of climate-linked support measures, including plans to repeal greenhouse gas limits on cars and trucks. This policy reversal now clashes with long-term investment cycles for automakers and battery producers.

EV affordability and US supply chains face fresh headwinds

The end of the US EV tax credit comes while EVs still cost more than conventional cars. Recent data show US EVs carry an average price premium of around $8,000 over combustion models. Without the $7,500 federal incentive, many mass-market buyers lose a key financial lever that helped close the price gap. This will likely slow new orders, particularly in middle-income segments and fleet purchases.

Meanwhile, manufacturers warn that the loss of the credit weakens the business case for US-based EV and battery plants. The revised credit had pushed automakers to localise assembly and critical mineral sourcing inside the US or allied countries. Its removal undercuts one of the strongest pull factors for building gigafactories, cathode plants and related supply chain assets on US soil. Industry groups argue this shift could hand competitive advantage back to regions with more stable policy support.

State-level climate policy will now carry more weight in the US EV landscape. California and other Democratic-led states plan to maintain strict tailpipe standards and invest heavily in charging infrastructure. However, even ambitious state measures cannot fully compensate for the vanished federal incentive. Automakers must therefore navigate a patchwork of regional rules while recalibrating sales forecasts and capital plans in a post-credit market.

The Metalnomist Commentary

The US EV tax credit expiration exposes the tension between long-term industrial strategy and short-term political swings. For metals and battery supply chains, the key risk is stop-start demand that complicates investment in lithium, nickel and cathode capacity. Unless policy clarity returns, the US could cede ground to regions where EV incentives and climate regulations move in a steadier direction.

China and EU Resume Electric Vehicle Talks Amid Growing US Tariff Pressures

US tariff, China

Negotiations on Price Commitments Could Ease Trade Friction in the EV Market

China and the European Union (EU) have decided to resume negotiations regarding a price commitment mechanism for battery electric vehicles (BEVs). This decision follows the EU's implementation of countervailing duties on Chinese BEV imports in 2024. The goal of these talks is to replace the tariffs imposed on Chinese electric vehicles (EVs), addressing ongoing trade tensions between China and the EU.

EU's Countervailing Duties and the Push for a Price Commitment Mechanism

In October 2024, the European Commission finalized its ruling on countervailing duties on BEVs imported from China, which came into effect at the end of October. These duties ranged from 17% to 35.3%, impacting major Chinese automakers like BYD, SAIC, and Geely. The aim was to counter what the EU viewed as unfair pricing practices by Chinese EV manufacturers. However, these tariffs have faced opposition from both China and European companies seeking to expand their market share in the fast-growing electric vehicle sector.

Despite early talks on a price commitment mechanism in November 2024, the discussions stalled without significant progress. However, on April 10, 2025, China’s Ministry of Commerce announced that both sides had agreed to resume negotiations on the price commitments and to discuss broader issues of investment cooperation in the automotive industry.

US Tariffs Intensify the Pressure on China and the EU

The resumption of talks between China and the EU comes amidst escalating trade tensions with the United States. As of April 11, 2025, the US imposed a 145% tariff rate on imports from China, adding additional pressure on Chinese manufacturers, particularly in the electric vehicle and battery sectors. US President Donald Trump's tariffs, which were initially implemented in 2024, compounded by those under the Biden administration, have made it nearly impossible for Chinese EVs and lithium-ion batteries to enter the US market.

In an effort to counterbalance the US's growing tariff measures, China has been seeking closer economic ties with the EU. Chinese Premier Li Qiang held discussions with EU President Ursula von der Leyen on April 8, 2025, addressing the need for structural solutions to re-balance bilateral trade relations. The talks have emphasized the urgency of enhancing market access for European businesses in China and forging a collaborative approach to the challenges posed by US tariffs.

Potential Impact on the Electric Vehicle Market

If China and the EU reach an agreement on the price commitment mechanism, it could significantly alter the landscape for Chinese EVs in Europe. Prior to the implementation of the countervailing duties, the EU accounted for about 28% of China’s new energy vehicle (NEV) exports, which includes both BEVs and hybrid plug-in vehicles. However, the tariffs have drastically reduced Chinese EV exports to Europe.

The continuation of trade protectionist measures from both the US and the EU is putting immense pressure on China’s EV and battery markets, particularly as it struggles to enter key international markets. The future of Chinese electric vehicle exports largely hinges on these negotiations, and any breakthrough could bring Chinese-made EVs back into the competitive EU market.

US New Tariffs Could Disrupt China's Non-Exempt Metals Exports

China Tariffs

New tariffs on lithium, rare earth magnets, and more could affect China's metal exports to the US.

The United States has announced significant new tariffs on Chinese imports, with a notable focus on metals. While many non-ferrous metals and ferro-alloys have been exempted, some crucial exports from China, like lithium, rare earth magnets, and lithium-ion batteries, will face substantial increases in tariff rates. These changes are set to have a lasting impact on the trade between the US and China, especially in the energy storage and electric vehicle (EV) sectors.

High Tariffs on Lithium-Ion Batteries and Energy Storage

As of April 9, the US will implement an 82.4% tariff on electric vehicle (EV) power batteries and a 57.4% tariff on non-EV lithium-ion batteries from China. This substantial hike in tariffs will make Chinese-made batteries far more expensive and may eliminate the possibility of Chinese EV power batteries entering the US market. US consumers will likely absorb these costs, potentially leading to inflation in the US battery industry, especially in the energy storage sector.

China’s lithium-ion battery exports to the US had already been on the rise, with a 59% increase in exports during the first two months of the year. However, these new tariffs are expected to curb the growth of China's battery exports to the US and negatively affect lithium feedstock prices, which are currently at a four-year low.

Impact on Rare Earth Magnets

Rare earth magnets are another key area of concern, as these products were not exempted from the new tariffs. Despite some uncertainty about the exact tariff implementation, producers in China are anxious about the potential 54% tariff on rare earth magnets. China remains the dominant supplier of rare earth magnets globally, and while the US does have some alternatives, they are mostly focused on military applications with significantly higher prices. This makes it unlikely that the US can fully escape its dependence on China, especially for civilian applications.

China’s exports of rare earth magnets to the US in 2022 accounted for 12% of its total exports, and while tariffs could reduce this figure, China’s competitive pricing in the civil sector ensures its continued dominance in the global market.

Copper, Aluminium, and Hafnium: Other Affected Metals

While copper and aluminium are exempt from this latest round of tariffs, the copper industry remains on edge. US authorities are investigating the potential security implications of copper imports, and there’s speculation that a tariff may be imposed in the future. As for aluminium, Chinese exports are already subject to a steep 70% tariff, which is expected to discourage further aluminium exports to the US, pushing Chinese suppliers to seek alternative markets.

Hafnium, a critical metal used in aerospace applications, will also face a significant tariff hike, moving from 34% to 79%. This change could prompt US buyers to source hafnium from other regions, like Rotterdam, where the tariff is considerably lower.

Conclusion

The new US tariffs on Chinese metals exports are set to reshape the global metals market, particularly for lithium-ion batteries, rare earth magnets, and hafnium. While some sectors, like copper and aluminium, may have avoided immediate tariff hikes, long-term implications for the industry remain uncertain. The tariff increase on key metal exports from China to the US is expected to alter supply chains and increase costs for US consumers, especially in the EV and energy storage markets.

Most South African Mineral Exports to US Avoid Tariff Impact

South African Mineral Mining

PGMs, Gold, and Titanium Spared in Latest US Tariff Round

Most of South Africa’s mineral exports to the US, including platinum group metals (PGMs), have been exempted from new US tariffs. US President Donald Trump’s 2 April tariff announcement excluded PGMs, gold, manganese, titanium, chrome, and coal from the list of affected imports.

These exemptions are significant, as PGMs accounted for 76% of the R65.3 billion ($3.4 billion) in mineral and precious metal exports from South Africa to the US in 2024. However, iron ore and diamonds from South Africa will be subject to a 30% tariff, potentially straining trade ties and impacting specific sectors.

Auto Tariffs Threaten Downstream PGM Demand

A separate 25% tariff on US vehicle imports came into effect on 6 June, with auto parts tariffs set for 3 May. According to the Minerals Council South Africa (MCSA), these tariffs may reduce US auto demand, which in turn could lower PGM consumption.

PGMs—especially platinum, palladium, and rhodium—are essential in autocatalysts that reduce vehicle emissions. Lower car production would decrease catalyst demand, causing short-term price volatility in these critical metals.

Still, the MCSA remains optimistic about the long-term demand outlook for PGMs, citing structural demand drivers in clean mobility and hydrogen.

Limited Retaliation Options for South Africa

Despite the exemptions, broader trade tensions could still hurt South Africa’s mining sector. South Africa ships 7% of its total exports to the US, while accounting for just 0.25% of US imports—a disparity that limits its ability to retaliate.

Think tank Trade and Industrial Policy Strategies emphasized the need for diversification, urging South African exporters to find alternative markets. With the global economy under pressure from rising trade barriers, the ripple effect could dampen overall commodity demand and GDP growth.

The Metalnomist Commentary

The exemptions granted to South Africa’s key mineral exports show strategic prioritization by the US to maintain critical supply chains. Yet, the indirect consequences—especially in sectors like automotive and high-tech—may eventually flow back to impact even exempted metals. The situation reinforces the need for South Africa to accelerate market diversification and downstream value-add strategies in mining.

Tesla Retains Top Spot as Largest BEV Maker in 3Q, GM Gains Ground

Tesla CYBERTRUCK

Tesla continues to lead the global battery electric vehicle (BEV) market, edging out China's BYD in the third quarter of 2024. Despite a slight dip in year-to-date sales compared to last year, the US carmaker remains the world's largest BEV producer. Meanwhile, General Motors (GM) has surpassed Ford to become the second-largest BEV brand in the US, marking a significant shift in the competitive landscape.

Tesla and BYD Dominate, But GM Grows Stronger in the US

In the third quarter, Tesla reported global sales of 462,890 units, bringing its year-to-date total to 1.29 million BEVs. This is a small decline from the 1.32 million units sold during the same period last year, reflecting a slower sales pace in the first half of 2024. BYD, Tesla’s closest competitor, has recorded approximately 1.17 million BEV sales so far this year. The Chinese automaker's overall new energy vehicle (NEV) sales, including plug-in hybrids, reached 2.7 million units, demonstrating its robust market presence.

In the US market, GM has made notable gains, capitalizing on Tesla's declining market share. Tesla's US market share slipped to 49.7% in the second quarter, a significant drop from its 74.8% share in early 2022. GM's BEV sales rose by 60% year-over-year and 46% quarter-over-quarter, with 32,195 units sold in the third quarter. This growth came despite a 2.2% dip in GM’s overall car sales during the same period. The company's focus on affordable models, including the newly launched Equinox EV, has proven effective. Starting at around $35,000 and eligible for tax credits that bring the price down to as low as $27,495, the Equinox EV is currently the most affordable electric vehicle in the US.

For comparison, Tesla's most affordable Model Y starts at approximately $37,500 after tax credits, though used models can be found for as low as $25,000. The affordability of these models, aided by the US Inflation Reduction Act, which provides a $7,500 tax credit for selected US-made EVs, has been a critical factor in boosting sales. As of October 1, the tax credit has saved US buyers over $2 billion this year.

Ford, now the third-largest BEV brand in the US, sold 23,509 units in the third quarter. Although this represents a 12% year-over-year increase, sales were down 2% from the previous quarter. The automaker is shifting its strategy, planning to introduce a new electric pickup in 2027 while scaling back plans for larger electric SUVs to focus on smaller, more affordable models, a move aimed at staying competitive with GM’s expanding BEV lineup.

Volkswagen ID.4 Production Halt Shows US EV Demand Pressure

Volkswagen EV

Volkswagen ID.4 production in the US will end as the German automaker shifts its Chattanooga, Tennessee, plant toward higher-volume internal combustion vehicle output. The decision reflects weaker electric vehicle demand in the US and the need to protect North American manufacturing utilisation.

Volkswagen said the EV market continues to challenge the industry and requires measured decisions. The company will stop producing the ID.4 at Chattanooga and begin assembling the all-new second-generation Atlas from mid-April 2026.

Volkswagen ID.4 production has been strategically important because the model is the company’s top-selling EV in the US. However, the ID.4 sold 22,373 units in 2025, far below the Atlas, which sold 71,044 units and remained Volkswagen’s second-best-selling model for the past three years.

The decision shows how automakers are adjusting production footprints as EV adoption slows. US EV sales fell by 27% year on year to 216,300 units in the first quarter, creating pressure on manufacturers to rebalance plant capacity, dealer inventory and product planning.

Chattanooga Shift Prioritises Higher-Volume SUV Demand

The Chattanooga plant will now focus on the second-generation Atlas, a three-row sport utility vehicle with much stronger US sales momentum. This gives Volkswagen a clearer volume base in a market where larger SUVs remain commercially attractive.

The move is not a full retreat from the ID.4. Volkswagen said model-year 2026 ID.4 vehicles will remain available through current inventory, supporting US demand into 2027. The company also plans a future version of the ID.4 for North America, although details have not yet been disclosed.

Still, the production shift is significant. Automakers rarely remove capacity from a model unless demand, margin or manufacturing strategy has changed. In this case, Volkswagen appears to be choosing a higher-volume SUV platform over a slower-moving EV in the near term.

This reflects a wider industry trend. EV demand has become more uneven as consumers respond to vehicle prices, charging access, policy uncertainty and changing incentive structures. Automakers now need more flexible production strategies rather than relying on straight-line EV growth forecasts.

EV Slowdown Could Weigh on Battery Materials Demand

Volkswagen ID.4 production changes also matter for the battery materials supply chain. Lower EV output can reduce near-term demand for lithium, nickel, graphite, manganese, copper, aluminium and rare earth magnet materials linked to electric drivetrains and battery systems.

The effect will not come from Volkswagen alone. The bigger issue is that several automakers are reassessing EV production rates in response to slower consumer adoption. If this pattern continues, battery material demand growth may become more volatile than earlier industry forecasts suggested.

For suppliers, the shift creates a timing problem. Many battery, cathode, anode and recycling investments were planned around rapid EV market expansion. Slower model-level output can leave material producers exposed to weaker offtake, lower utilisation and price pressure.

At the same time, Volkswagen’s decision does not eliminate long-term EV demand. It shows that the transition may move in phases, with automakers balancing EVs, hybrids and combustion vehicles depending on regional demand. North America may therefore remain a more mixed powertrain market than China or parts of Europe.

The Metalnomist Commentary

Volkswagen’s ID.4 decision shows that EV strategy is now being tested by real factory economics. The energy transition is still moving forward, but automakers will increasingly prioritise models that protect utilisation, margins and supply-chain stability.

General Motors Higher Metal Prices Add New Pressure to 2026 Auto Costs

General Motors

General Motors higher metal prices are becoming a major issue for the company in 2026. GM expects higher copper, aluminum, and semiconductor prices to add more than $1bn to costs this year. As a result, General Motors higher metal prices now sit at the center of its margin challenge.

The pressure is not coming from metals alone. Auto tariffs and a weaker EV business are also pushing costs higher. Therefore, GM 2026 costs reflect both commodity inflation and a changing US vehicle market.

Copper and aluminum show how quickly input costs have moved. Copper prices climbed sharply over the past year, while US aluminum prices rose under tariff pressure. Meanwhile, semiconductor costs and foreign-exchange movements are adding further strain. Consequently, GM faces a broader cost inflation problem, not a single metal shock.

Metals and Tariffs Are Rewriting GM’s Cost Structure

General Motors higher metal prices are now feeding directly into manufacturing economics. GM said copper, aluminum, semiconductors, and currency moves could add $1bn-$1.5bn in extra costs this year. That is a significant burden even for a large global automaker. Therefore, pricing, sourcing, and production discipline will matter more in 2026.

Tariffs are intensifying that pressure. GM paid $3.1bn in tariffs last year and expects to pay $3bn-$4bn this year. The company now faces a full first quarter under the tariff regime. As a result, policy costs are becoming almost as important as raw material costs.

US aluminum tariffs are especially important for automakers. Aluminum is critical in body structures, wheels, castings, and lightweight components. Higher domestic premiums can quickly flow through supplier contracts and finished vehicle costs. Consequently, aluminum inflation remains a serious issue for the auto industry.

EV Weakness and Product Mix Are Complicating the Outlook

GM 2026 costs are rising as its EV business loses momentum. The company expects EV sales to fall this year after tax credits for US consumers expired. That change has pushed many automakers to cut EV production. Therefore, GM must manage inflation while facing weaker growth in one of its key future segments.

The company still has strengths in its broader sales base. US sales rose 6pc to 2.9mn vehicles in 2025, while global sales increased 3pc to 6.2mn. Internal combustion vehicle sales are expected to remain steady this year. However, stable volumes do not fully offset margin pressure from rising inputs and tariffs.

GM is also responding with more domestic investment. The company said it would invest $4bn to expand US manufacturing over the next two years. That may support longer-term resilience under the current trade regime. Meanwhile, near-term profitability remains under pressure from costs and the EV reset.

The Metalnomist Commentary

GM’s challenge now looks less like a normal auto cycle and more like a materials and policy squeeze. Copper, aluminum, and tariffs are shaping vehicle economics as much as consumer demand. If these pressures persist, automakers will need stronger sourcing strategies, not just better sales volumes.

US UAE Critical Minerals Fund Targets Near-Term Supply Security

Orion Resource Partners

The US UAE critical minerals fund aims to rapidly strengthen non-Chinese supply chains for strategic metals and minerals. The new vehicle, led by the US International Development Finance Corporation (DFC), Orion Resource Partners and UAE sovereign fund ADQ, starts with $1.8bn in commitments and targets $5bn over time. As a result, the US UAE critical minerals fund immediately positions itself as one of the largest dedicated pools of capital in this space.

US UAE critical minerals fund focuses on producing and near-producing assets

The US UAE critical minerals fund will prioritise existing or near-term producing assets rather than early-stage exploration. This approach reflects government urgency to secure physical flows of rare earths, battery metals and other strategic materials within this decade. Therefore, capital will likely concentrate on brownfield expansions, processing plants and last-mile infrastructure instead of high-risk greenfield drilling campaigns.

Public-private partnerships in critical minerals are becoming a defining feature of the energy transition. Earlier this week, Appian Capital Advisory and the International Finance Corporation launched a $1bn fund for similar purposes. Meanwhile, the US government has repeatedly partnered with private investors as it tries to dilute dependence on Chinese refining and processing capacity.

US security strategy extends from stockpiles to allied supply chains

The new US UAE critical minerals fund complements a broader US security toolkit that includes stockpiles and equity stakes. The US Defense Logistics Agency has been issuing requests for proposals to expand domestic critical mineral inventories beyond current annual production and imports. In parallel, the Pentagon acquired a 15pc stake in MP Materials, the only integrated US rare earths producer, backed by an offtake agreement with a price floor for NdPr products.

However, Washington is also exporting this strategy through alliances. The recent US–Australia agreement will channel at least $1bn from each government into priority critical minerals projects in both countries over the next six months. By aligning funds such as the US UAE critical minerals fund with bilateral deals, the US is stitching together a network of “friendly” mines, refineries and separation plants across multiple jurisdictions.

Over time, these overlapping initiatives could create alternative pricing references and more transparent offtake structures. As a result, investors may gain better visibility on project cash flows in a market still dominated by opaque Chinese contract terms and discretionary export policies.

The Metalnomist Commentary

The US UAE critical minerals fund underscores how geopolitics is now hard-wired into capital allocation for mining and processing. If the consortium executes quickly on producing and near-producing projects, it could materially accelerate non-Chinese supply in rare earths and other key minerals. The real test will be whether these funds can overcome permitting delays, community concerns and price volatility that have historically slowed critical minerals development.

Cleveland-Cliffs Rare Earths Plan Stalls on US Refining Bottleneck

Cleveland-Cliffs

Cleveland-Cliffs rare earths ambitions have been put on hold as limited US refining capacity weakens the economics of upstream exploration. The integrated steelmaker said it has halted plans to shift part of its mining strategy toward rare earths because domestic processing infrastructure remains too limited.

The decision highlights a central weakness in the US critical minerals strategy. Finding rare earth mineralisation is only the first step. Without refining, separation and downstream conversion capacity, upstream resources cannot easily become commercial supply.

Cleveland-Cliffs rare earths plans had gained attention because the company owns mining assets and tailings basins in traditional US iron ore regions. Geological surveys last year identified signs of rare earth mineralisation at two company-owned sites, one in Michigan’s Upper Peninsula and another in Minnesota.

However, chief executive Lourenco Goncalves said the economics depend on domestic refining capability. He said that infrastructure remains extremely limited in the US, making rare earth development difficult without external processing support.

US Refining Gap Limits Critical Minerals Development

Cleveland-Cliffs is not planning to build rare earth refining capacity on its own. The company said the process is capital-intensive, and the investment case remains weak without a broader domestic refining ecosystem.

This is strategically important because rare earth supply chains are highly segmented. Mining, beneficiation, separation, refining, metal conversion, alloying and magnet manufacturing all require different capabilities.

The US has focused heavily on rare earth resource development, but refining and separation remain among the most difficult parts of the value chain. These stages require chemical processing expertise, environmental controls, long permitting timelines and large capital commitments.

Cleveland-Cliffs rare earths development therefore depends on infrastructure beyond its own mining footprint. The company said it remains positioned to enter the market when viable domestic refining capacity becomes available, whether through government-backed projects or third-party investments.

This approach is cautious but realistic. A steelmaker with mineral resources may identify rare earth potential in ore bodies or tailings, but it cannot easily monetise those materials without a customer-ready processing route.

The decision also shows why tailings-based critical minerals projects are harder than they appear. Tailings may contain valuable elements, but recovery depends on grade, mineralogy, processing cost, environmental permitting and access to refining capacity.

For the US government, the message is clear. Critical mineral independence cannot rely only on resource mapping. It needs industrial processing capacity that gives miners and materials companies a practical route to market.

Rare Earth Opportunity Remains Conditional on Policy and Processing

Cleveland-Cliffs had explored rare earths as part of a broader response to rising US-China trade tensions and Washington’s push for critical material independence. The company’s historic identity as an ore producer made the idea strategically plausible.

Cliffs originally operated as an iron ore producer before becoming a major US steelmaker. It expanded downstream in 2020 by acquiring AK Steel and most of ArcelorMittal’s US operations.

That history gives the company mining expertise, industrial assets and a domestic manufacturing base. But rare earths are not the same as iron ore or steel. They require a much more specialised chemical and metallurgical value chain.

Rare earth elements are key feedstocks for electric vehicle motors, semiconductors, wind power, solar technologies, defence systems and advanced electronics. This makes them strategically valuable, but also politically sensitive.

The US wants to reduce dependence on China, which dominates many rare earth processing and magnet supply chains. But companies still need bankable refining options before upstream projects can move forward.

Cleveland-Cliffs rare earths strategy may therefore return if domestic refining capacity expands. Government-backed projects, third-party processors or integrated separation facilities could change the economics.

Until then, the company appears unwilling to commit capital to a market where upstream potential is disconnected from downstream processing. That reflects discipline, but also exposes a national supply-chain gap.

The broader implication is that critical minerals policy must connect every stage of the chain. Exploration without refining creates stranded potential. Refining without feedstock creates underused capacity. Magnet and electronics supply chains need both.

The Metalnomist Commentary

Cleveland-Cliffs’ decision shows that the US rare earth challenge is not only geological. The real bottleneck is processing infrastructure, and without it, even strategically located resources can remain commercially stranded.

Samsung SDI BESS Supply Deal Strengthens US Energy Storage Battery Chain

Samsung SDI BESS

Samsung SDI BESS supply deal activity is accelerating in the US as demand for grid-scale battery storage continues to rise. The South Korean battery manufacturer has secured a 1.5 trillion won, or about $1 billion, contract to supply BESS batteries to a US energy company over four years.

The Samsung SDI BESS supply deal will run from 2026 to 2029. The batteries will be supplied in phases, supporting the rapid buildout of US battery energy storage systems as utilities, renewable developers, and infrastructure operators seek more flexible power capacity.

The agreement also strengthens Samsung SDI’s US manufacturing strategy. The batteries will be produced at StarPlus Energy’s plant in Indiana, a joint venture between Samsung SDI and Stellantis.

Indiana Production Links Battery Storage to Domestic Manufacturing

The StarPlus Energy facility gives Samsung SDI a local production base for the US energy storage market. This matters because US customers increasingly value domestic or regionally anchored battery supply chains, especially for energy infrastructure projects.

Initial deliveries will use nickel-cobalt-aluminum batteries. This chemistry gives Samsung SDI a route to serve early BESS demand while preparing for broader chemistry diversification.

Later expansion will include lithium iron phosphate batteries. LFP batteries are becoming more important in stationary storage because cost, safety, cycle life, and scale matter more than maximum energy density in many grid applications.

LFP Expansion Signals a Wider Shift in US BESS Demand

The Samsung SDI BESS supply deal follows another major LFP agreement signed last December with an unnamed US energy infrastructure company. That earlier contract was valued at two trillion won, or about $1.33 billion.

Together, the deals show that Samsung SDI is moving more aggressively into the US battery energy storage systems market. The company is no longer positioned only around electric vehicle batteries, but also around grid storage and power infrastructure.

This shift has important materials implications. BESS growth will increase demand for lithium, iron phosphate materials, nickel, cobalt, aluminum, copper, graphite, separators, electrolytes, and power electronics. It will also intensify competition among Korean, Chinese, Japanese, and US-linked battery supply chains.

The Metalnomist Commentary

Samsung SDI’s latest contract confirms that US battery demand is shifting from EV-only growth toward a broader energy infrastructure cycle. For battery makers, chemistry flexibility and local production are becoming as important as scale itself.

US Tariffs Pressure Copper Prices and Curb China’s Scrap Imports

China Copper

US tariffs, introduced by President Donald Trump on April 2, have significantly impacted global copper prices. The tariffs, set at a minimum 10% tax on all foreign imports, have caused concerns about weakened copper demand, particularly from key industries that rely on copper, such as automobiles and home appliances. China’s copper scrap imports are also under pressure due to retaliatory tariffs, which will be implemented by China on April 10.

Impact of Tariffs on Copper Prices

Following the announcement of tariffs, copper prices saw a dramatic decline. As of April 7, London Metal Exchange (LME) three-month copper prices fell to a one-year low of $8,105 per ton, a significant drop from $9,721 per ton on April 2. Similarly, Shanghai Futures Exchange (SHFE) prices also plummeted to a three-month low of 73,640 yuan per ton from 79,890 yuan per ton during the same period.

Although copper itself is not directly affected by the new tariffs, the downstream sectors, such as automotive manufacturing and home appliances, face substantial tariffs. This will likely depress demand for copper, as these industries represent significant end-users of copper products.

US Tariffs on Cars and Appliances Affect Copper Demand

A 25% tariff on imported cars and trucks came into effect on April 3, with a further 25% tax on auto parts set to follow in May. The US light vehicle market saw significant growth in 2024, with sales climbing to 16.8 million units. Similarly, the US imported $23.5 billion worth of home appliances from China in 2024. These appliances, including cooling devices and electronics, represented 23% of global copper demand in 2023. The imposition of tariffs on these goods will likely lead to a reduction in copper demand from the US.

On a positive note, lower copper prices may drive copper fabricators to restock in the short term, especially after a significant price drop in late March. Data from the SHFE shows that copper stocks fell from 256,328 tons on March 21 to 225,736 tons by April 3, as downstream buyers rushed to purchase copper cathode in response to falling prices.

China’s Retaliatory Tariffs and Copper Scrap Imports

China’s planned tariffs on US copper scrap, set to take effect on April 10, will impact copper supply in the country. In 2024, China imported over 440,000 tons of copper scrap from the US, accounting for nearly 20% of its total copper scrap imports. However, market participants predict that some traders will attempt to bypass the tariffs by sourcing US-origin copper scrap from other countries.

In February, US copper scrap exports fell by 10% compared to the previous year, with China seeing the largest drop in imports. This decrease in exports can be attributed to tariff expectations, which have made it difficult for US exporters to remain competitive. The large spread between CME and LME prices has further strained export options, leaving US dealers with excess scrap volumes.

Limited Impact on Copper Concentrate and Cathode Supplies

China’s retaliatory tariffs are expected to have a minimal impact on its domestic copper concentrate and cathode supply. In 2024, China imported just 460,000 tons of copper concentrate and 1,575 tons of copper cathode from the US, representing only a small fraction of its total imports. Therefore, the retaliatory tariffs are unlikely to cause significant disruptions to these supply chains.

Vedanta launches US copper subsidiary to scale Zambian copper output

Vedanta Resources

Vedanta launches US copper subsidiary CopperTech Metals to drive long-term growth at Konkola Copper Mines in Zambia. By launching Vedanta launches US copper subsidiary, the group links Wall Street capital with African copper resources. As a result, Vedanta launches US copper subsidiary becomes a central vehicle for meeting rising global copper demand.

CopperTech Metals targets aggressive Konkola production growth

CopperTech plans to significantly expand capacity at Konkola Copper Mines over the next decade. The US-based unit expects to invest $1.5bn, in addition to Vedanta’s $3bn commitment. Together, these investments aim to lift annual production from about 140,000t this year to 300,000t/yr by 2031.

The company is already signalling ambitions beyond that medium-term goal. Over time, CopperTech aims to push Konkola output toward 500,000t/yr, subject to geology, infrastructure and market conditions. This growth profile would position Konkola among Africa’s more significant copper hubs. It would also align the mine with long-cycle demand from energy transition, EVs and grid expansion.

Ownership stability is another critical pillar for the strategy. The Zambian government returned control of Konkola to Vedanta in July 2024, ending a protracted dispute. That resolution allows CopperTech to plan multi-billion dollar capex on a clearer legal and operational footing. It also signals Zambia’s desire to attract investment while retaining leverage over strategic mineral assets.

Strategic rationale behind Vedanta launches US copper subsidiary

The decision that Vedanta launches US copper subsidiary reflects the strategic importance of copper for energy transition. CopperTech gives Vedanta a US-facing corporate structure that can access capital markets and strategic offtakers. This structure may improve financing flexibility for future plant expansions and underground development.

Meanwhile, Vedanta launches US copper subsidiary in a context of tightening global copper supply. Many legacy mines face declining grades, while new greenfield projects struggle with permitting and ESG scrutiny. In this environment, brownfield expansion at Konkola offers a relatively faster route to new tonnes. It also supports Zambia’s ambition to grow its share of global refined copper supply.

As a result, Vedanta launches US copper subsidiary not only restructures ownership but also reframes the mine within global supply chains. Copper produced at Konkola will increasingly feed renewable energy, EV and infrastructure value chains. That link will draw greater scrutiny around environmental performance, community engagement and governance standards in the Copperbelt.

The Metalnomist Commentary

By channeling new investment through CopperTech, Vedanta is betting that US-linked governance and capital access will enhance Konkola’s strategic value. The scale of planned expansions underscores how central Zambian ore will be in the next copper upcycle. For traders, smelters and OEMs, the real question now is whether execution, regulation and ESG performance can keep pace with these ambitious volume targets.

India-US Critical Minerals Agreement Targets Mining, Processing and Recycling Security

India-US Critical Minerals

India-US critical minerals agreement marks a new step in efforts to secure mining, processing and recycling routes for strategic minerals and rare earth elements. The bilateral framework covers materials needed for electric vehicle batteries, semiconductors, solar panels, defence systems and artificial intelligence hardware.

India-US critical minerals agreement was signed on the sidelines of the Quad Foreign Ministers’ Meeting in New Delhi. Indian external affairs minister S Jaishankar and US secretary of state Marco Rubio attended the signing.

India-US critical minerals agreement reflects growing concern over concentrated supply chains. China dominates refining and processing for lithium, nickel, cobalt and rare earths, leaving India and the US exposed to supply disruption, export controls and price leverage.

The pact covers the full value chain, from extraction and processing to recycling, financing and long-term material management. That broader scope is important because raw mineral access alone does not create industrial supply security.

Processing Capacity Becomes the Strategic Priority

The agreement directly targets one of the biggest weaknesses in non-China critical mineral supply chains: processing. Mining resources matter, but value is captured when materials are refined, separated and qualified for industrial use.

China accounts for around 60-70% of global refining and processing capacity for key minerals such as lithium, nickel and cobalt. It also controls about 90% of rare earth refining.

That dominance gives China strong influence over battery materials, magnet inputs, semiconductor minerals and advanced manufacturing supply chains. It also makes diversification difficult because new projects must compete with established Chinese scale and cost advantages.

India has significant long-term rare earth potential. Its monazite reserves contain an estimated 7.23mn t of rare earth oxides, but commercial output remains limited.

The new framework could help India convert resource potential into usable supply. That will require investment in mining, separation, refining, metallurgy, environmental management and customer qualification.

For the US, India offers a strategic partner with mineral resources, industrial ambition and a large domestic market. For India, the US can provide financing, technology partnerships, customer demand and policy support.

Rare Earth Corridors Fit India’s Industrial Strategy

India’s latest budget introduced a policy framework to develop rare earth corridors across Odisha, Kerala, Andhra Pradesh and Tamil Nadu. These regions could become the foundation for a more integrated rare earth supply chain.

The corridor model matters because rare earth development requires clustering. Mining, mineral sands processing, separation, waste management, logistics and downstream manufacturing need to be connected.

India is also widening its international partnerships. It signed a critical minerals cooperation agreement with Brazil in February 2026, showing that New Delhi wants a diversified supply network across multiple geographies.

The India-US framework adds a stronger strategic layer. It links India’s domestic minerals policy with Washington’s push to reduce dependence on China in defence, batteries, semiconductors and AI-related hardware.

Recycling is also part of the agreement. That inclusion is important because recovered battery metals, rare earth magnets and industrial scrap can reduce long-term import dependence.

However, execution will decide the real impact. India must move faster on permitting, processing technology, financing and downstream customer development if it wants to become a serious critical minerals hub.

The agreement gives both countries a framework. The next challenge is turning policy language into operating mines, refineries, recycling plants and qualified material flows.

The Metalnomist Commentary

The India-US deal shows that critical minerals security is now a full-chain industrial policy issue. The countries that win will not only secure ore; they will control processing, recycling, financing and qualified supply for strategic end markets.

US Offshore Mineral Lease Request Begins Federal Evaluation Process

Impossible Metals

US offshore mineral lease evaluation commenced as the Department of Interior initiates assessment of deep-sea mining company Impossible Metals' request for critical minerals exploration off American Samoa. The unprecedented US offshore mineral lease application submitted to the Bureau of Ocean Energy Management (BOEM) on April 8th targets nickel, magnesium, cobalt, copper, and rare earth minerals using autonomous underwater robotics, representing the first commercial critical minerals lease request in federal outer continental shelf waters.

Federal Register Process Launches Public Comment Period

US offshore mineral lease evaluation will begin with Federal Register notice publication soliciting public comment on Impossible Metals' application under the Outer Continental Shelf Lands Act of 1953. BOEM regulates federally managed ocean areas spanning 3-200 nautical miles offshore, encompassing the outer continental shelf where critical minerals deposits potentially exist. This formal evaluation process marks unprecedented territory as BOEM has never issued commercial leases for critical minerals exploration or extraction according to the Congressional Research Service.

Meanwhile, the application targets ferro-manganese crusts and polymetallic nodules identified by BOEM studies as potential sources of manganese, nickel, cobalt, and rare earth minerals. These formations occur in areas offshore of US Pacific islands, including American Samoa, where Impossible Metals plans autonomous underwater robot deployment. The technology approach represents advanced deep-sea mining capabilities designed for minimal environmental impact while accessing strategic mineral resources.

Strategic Minerals Access Addresses Supply Chain Vulnerabilities

However, the lease request reflects broader US government priorities to secure domestic critical minerals access amid global supply chain vulnerabilities. Nickel, cobalt, copper, and rare earth elements represent essential materials for clean energy technologies, electric vehicle batteries, and defense applications. Offshore mineral resources could diversify supply sources beyond traditional mining jurisdictions while reducing import dependencies.

Therefore, American Samoa's location positions potential operations strategically within US territorial waters while accessing Pacific Ocean mineral formations. The outer continental shelf contains substantial untapped critical minerals reserves that could support domestic manufacturing and energy transition requirements. Federal evaluation will assess environmental impacts, technical feasibility, and regulatory frameworks for sustainable deep-sea mining operations.

Regulatory Precedent Shapes Future Deep-Sea Mining Policy

Furthermore, BOEM's evaluation will establish regulatory precedents for future commercial critical minerals applications in US waters. The comprehensive assessment includes environmental impact analysis, stakeholder consultation, and technical review of proposed mining methodologies. Federal agencies must balance resource development opportunities with marine ecosystem protection and existing ocean use activities.

As a result, the Impossible Metals application represents a test case for US deep-sea mining regulatory frameworks while addressing critical minerals supply security objectives. Successful evaluation could unlock substantial offshore mineral resources supporting domestic clean energy and defense industries. The precedent-setting nature of this application will influence future policy development for critical minerals extraction in federal waters.

The Metalnomist Commentary

The US offshore mineral lease evaluation represents a watershed moment for American critical minerals policy, potentially establishing the regulatory framework for accessing vast untapped seabed resources essential for clean energy and defense applications. While environmental considerations will require careful assessment, the strategic importance of reducing import dependencies for critical materials may drive supportive policy outcomes that could reshape US mineral supply chain security through innovative deep-sea mining technologies.

US Automakers Rare Earth Crisis Threatens Assembly Line Shutdowns

US Rare Earths

The Vehicle Suppliers Association warned of imminent US automakers rare earth crisis disrupting production lines. Assembly shutdowns could occur by May-end without reliable Chinese rare earth and magnet supplies. This US automakers rare earth crisis highlights America's critical vulnerability in automotive supply chains.

Critical Components Face Supply Disruption

Rare earth materials and magnets enable production of essential automotive components across vehicles. These include transmissions, alternators, sensors, seat belts, speakers, and power steering systems. Meanwhile, US imports from China increased 32% to 6,189 tonnes January through April. However, this volume remains insufficient to buffer against potential Chinese export restrictions.

China maintains strategic ambiguity regarding its rare earth export control policies deliberately. Furthermore, trade tensions escalated after both nations alleged preliminary trade deal violations. The fragile trade truce faces renewed pressure from these mounting disagreements.

Strategic Implications for American Manufacturing

The Vehicle Suppliers Association urgently petitioned State and Commerce Departments for intervention. Assembly line disruptions could reduce production volumes or trigger complete manufacturing shutdowns. Therefore, the US automakers rare earth crisis demands immediate diplomatic and policy responses. Presidents Trump and Xi Jinping may discuss solutions as early as this week.

This vulnerability exposes America's dangerous dependence on Chinese critical mineral supplies. Moreover, automotive electrification increases rare earth magnet demand for EV motors substantially. As a result, supply chain diversification becomes essential for national economic security. The crisis underscores urgent needs for domestic rare earth processing capabilities development.

The Metalnomist Commentary

This crisis reveals the strategic miscalculation of allowing China to dominate 90% of global rare earth processing while US automakers accelerate EV transitions requiring these materials. The 32% import surge suggests panic buying, but stockpiling cannot substitute for resilient supply chains. Without immediate action on domestic processing capacity, America's automotive competitiveness remains hostage to Beijing's export policies.

Mercedes Alabama Auto Plant Investment Strengthens US SUV Manufacturing Base

Mercedes Alabama

Mercedes Alabama auto plant investment plans will expand the German automaker’s US production footprint through 2030. Mercedes-Benz announced on 31 March that it would invest $4bn in its Tuscaloosa, Alabama, sport utility vehicle plant.

The investment forms part of a broader $7bn US manufacturing plan. The Alabama facility produces Mercedes SUVs including the GLE, GLS and Maybach GLS, and also assembles the EQE and EQS electric SUVs.

Mercedes Alabama auto plant investment is strategically important because the Tuscaloosa site is already a major export platform. Mercedes exports about 60% of the vehicles produced there, making the plant part of both US manufacturing and global premium SUV supply.

Tuscaloosa Expansion Supports Premium SUV and EV Production

The Tuscaloosa plant has assembled 4.5mn vehicles since opening in 1997. That implies average production of about 160,700 vehicles per year, although Mercedes did not disclose current annual output.

The plant employs 5,800 people and remains one of Mercedes’ most important manufacturing assets outside Germany. The new spending should support capacity, process upgrades and future model flexibility.

Mercedes Alabama auto plant investment also keeps the company positioned in the large SUV segment, where US production offers logistical and market advantages. For electric SUVs, local assembly can also support regional supply-chain strategy and reduce exposure to trade friction.

Automotive Materials Demand Remains Tied to US Assembly Growth

The investment has direct implications for automotive materials demand. SUV production requires large volumes of steel, aluminium, copper, plastics, glass, electronic components and high-performance castings.

Electric SUV production adds another layer. Battery packs, power electronics, motors and charging systems increase exposure to copper, aluminium, lithium, nickel, graphite and rare earth magnets.

For suppliers, the key opportunity is not only higher vehicle output. It is the growing materials intensity of electrified premium vehicles, where lightweight structures, electrical systems and battery platforms carry more value per unit.

The Metalnomist Commentary

Mercedes’ Alabama investment shows that premium automakers still view US manufacturing as a strategic export and electrification base. The materials story will depend on how quickly SUV production shifts toward electric platforms and higher-value lightweight components.

🇺🇸 Japan’s Auto Industry Faces Crossroads Over US Tariff Strategy

🇺🇸 Japan’s

Tariff Pressures Stir Strategic Choices for Japanese Automakers

Focus Keyphrase: US auto tariffs impact on Japanese car industry

Japan’s automotive sector is at a critical juncture due to the 25% US import tariff imposed on April 3. Although the immediate impact has been muted, the industry is bracing for difficult decisions ahead.

The Ministry of Economy, Trade and Industry (Meti) reported on April 18 that Japanese carmakers haven’t yet seen significant fallout, thanks to existing inventories shipped before the tariffs took effect. However, manufacturers are now debating whether to pass on the cost to US consumers or absorb the losses.

Balancing Price and Demand

Raising prices risks dampening US demand — a major export destination accounting for over one-third of Japan’s vehicle exports. But absorbing the tariff costs would squeeze profit margins, especially for auto parts manufacturers, who are already under pressure to cut prices.

Meti’s survey noted growing concerns among component producers about production cuts if US demand falters. Japan Automobile Manufacturers Association chairperson Masanori Katayama hinted at production adjustments if the tariff persists.

Diplomatic Path Remains Murky

Japan and the US held ministerial talks on April 17, yet no clear resolutions emerged. Another round is planned this month. Still, analysts say the talks may stall unless the US addresses its auto trade deficit with Japan — a longstanding issue for former President Donald Trump, who has been vocal about the imbalance.

In 2024, Japan exported around 1.3 million passenger vehicles to the US, while importing only 23,000 US cars in 2023 — a stark contrast fueling trade friction.

Whether Japan’s carmakers cut production, raise prices, or find alternatives will shape the trajectory of its auto trade relationship with the US.

US Defense Stake in Trilogy Metals Signals Strategic Copper Push

Trilogy Metals

US defense stake in Trilogy Metals marks a new phase in American critical minerals policy. The US Department of Defense will acquire a 10pc equity position in Trilogy Metals through a $35.6mn investment, directly supporting the Upper Kobuk Minerals Projects in Alaska. This US defense stake in Trilogy Metals aligns with Washington’s broader effort to secure domestic supplies of copper, zinc, lead and cobalt for energy transition and defense applications. The funding targets early-stage exploration and development, giving the government a financial foothold in a key North American resource district.

US defense stake in Trilogy Metals reshapes project governance

The share deal will significantly reshape the ownership and governance structure around the Ambler district assets. Trilogy, South32 and their joint venture vehicle Ambler Metals have agreed that the DOD will purchase 16.4mn Trilogy shares, split evenly between new issuance and stock sold by South32. As a result, the US defense stake in Trilogy Metals will include a 10pc holding in the company plus a transferred 10-year call option over an additional 6.2mn shares. In parallel, the DOD gains the right to appoint an independent director to Trilogy’s board for three years, embedding strategic oversight at the governance level. This board presence reinforces how the US defense stake in Trilogy Metals goes beyond financing and moves into influence over long-term project direction.

Ambler Access road and permitting move to the forefront

The investment also targets the bottlenecks that have slowed development of the Ambler district. The partners and the US government plan to collaborate on permitting, financing and construction of the Ambler Access road, linking the remote Upper Kobuk Minerals Projects to the Dalton Highway. As a result, the package couples capital with political support for a key piece of Arctic infrastructure. The parties also intend to pursue expedited mine permitting, although environmental and community scrutiny in Alaska remains intense. If successful, the integrated approach could shave years off the path to first production and turn the Ambler district into a meaningful copper and zinc supplier for North American smelters.

The Metalnomist Commentary

This transaction shows how security concerns are pulling US government capital directly into junior mining equity, not just downstream refining. For Trilogy and South32, the partnership de-risks infrastructure and permitting, but it will likely raise expectations on ESG performance and project transparency. The Ambler district could become a test case for whether state-backed critical minerals strategies can overcome the permitting gridlock that has stalled many US copper projects.

Ford Energy BESS Deal With EDF Signals Automaker Push Into Grid Storage

Ford Energy

Ford Energy BESS deal with EDF Power Solutions North America marks a major step in Ford’s move from vehicle batteries into grid-scale energy storage. Ford Energy will supply EDF with 20GWh of battery energy storage systems over five years starting in 2028.

Ford Energy BESS deal gives EDF access to up to 4GWh/yr of DC block systems for utility-scale storage projects across the US. The agreement positions Ford Energy as a key domestic supplier for large energy storage developers.

Ford Energy BESS deal also shows how automakers are repurposing battery manufacturing assets for stationary storage. Ford is investing $2bn to convert its Glendale, Kentucky, battery facility for the BESS market.

The transaction connects three fast-growing demand drivers: grid storage, data centers and US-made battery systems. It also reinforces the strategic role of lithium iron phosphate batteries in stationary applications.

LFP Storage Supports Utilities, Data Centers and Industrial Customers

Ford Energy’s DC Block is a standardized 20ft containerized battery energy storage system. Each unit has 5.45MWh of capacity and uses lithium iron phosphate prismatic cells.

The system is available in two-hour and four-hour discharge configurations. That flexibility allows EDF to deploy storage across different grid services, renewable integration and peak-shifting applications.

LFP batteries are well suited to stationary storage because they offer cost advantages, safety benefits and long cycle life. They also reduce exposure to nickel and cobalt compared with higher-nickel lithium-ion chemistries.

Ford Energy plans to assemble BESS in the US for utilities, data centers, large industrial customers and commercial users. That customer mix reflects how electricity demand is changing.

Data centers are becoming a major new source of power demand. Battery storage can help manage grid congestion, renewable intermittency and backup power requirements.

EDF already has a large platform for deployment. The company has developed 26GW of projects and holds 17GW under service contracts, giving Ford Energy a major channel into the US storage market.

Repurposed Battery Capacity Strengthens US Storage Supply Chain

Ford Energy plans to deploy at least 20GWh/yr of BESS capacity, with first customer deliveries scheduled for late 2027. The EDF agreement will absorb a meaningful share of early output from 2028.

The Glendale investment is strategically important. It shows how battery manufacturing capacity originally linked to vehicle electrification can be redirected toward stationary storage.

This matters because EV demand growth has become less linear, while grid storage demand continues to rise. Automakers with battery manufacturing assets may find BESS a valuable second market.

The deal also strengthens the US energy storage supply chain. Domestic assembly can reduce logistics risk, support local content requirements and improve delivery certainty for infrastructure customers.

For battery materials, the agreement supports demand for lithium, phosphate, graphite, copper, aluminium and battery-grade chemicals tied to LFP cells and storage systems.

The wider implication is clear. Battery demand is no longer only an EV story. Utilities, data centers and industrial customers are becoming major buyers of battery systems as power reliability becomes a strategic constraint.

The Metalnomist Commentary

Ford’s EDF agreement shows that stationary storage is becoming a major outlet for battery manufacturing capacity. The strategic winners will be companies that can combine US assembly, LFP chemistry and long-term supply agreements with grid and data-center customers.

Tesla LFP cell production stays on track as US cathode push advances

Tesla LFP cell

Tesla LFP cell production remains on schedule as the company advances US lithium refining and cathode output. The plan prioritizes onshore battery materials and the first domestic LFP cells this year. The strategy targets energy storage markets alongside vehicle electrification.

Refining, cathode and storage milestones

Tesla said its LFP cell factory in Sparks, Nevada is nearing completion. The company began operating a lithium hydroxide refinery near Corpus Christi in December 2024. Energy storage deployments rose 2% to 9.6GWh in the recent quarter. Tesla also deployed the first Megapacks from its Shanghai factory. The company said paired solar and Megapack systems are cost-competitive with fossil power.

Demand, profitability and policy headwinds

Quarterly deliveries fell to 384,122 EVs, from 443,956 a year earlier. Second-quarter profit slipped 16% to $1.2bn on lower volumes and pricing. Tesla launched a Robotaxi service in Austin and introduced Model Y in India. The company reported market share declines across the US, Canada, Europe and China. Tesla LFP cell production remains central to its US supply chain plans.

However, tariff and policy shifts are pressuring margins. Tesla estimated about $300mn in added tariff costs this year. Two-thirds affect the automotive segment and the rest the energy business. The company cited challenges from the July 4 tax and energy law and tariffs. The $7,500 US tax credit repeal by quarter-end limited domestic vehicle supply. Management said early credit expirations also weigh on residential storage demand. Tesla LFP cell production is intended to offset import exposure over time.

The Metalnomist Commentary

Tesla’s domestic cathode and LFP build-out lowers geopolitical and tariff risk across its battery supply chain. Watch commissioning pace in Sparks and ramp efficiency at Corpus Christi for cost traction. Policy volatility remains the swing factor for US demand and profitability.