Significant risks and uncertainties across the electric vehicle value chain make a flexible strategy, strong partnerships, and transparency essential.By Pedro Correa, Cate Hight, Rob Pick, and Clay StrangerBuilding a Resilient Global EV Supply Chain Amid UncertaintyCopyright © 2023 Bain & Company, Inc. All rights reserved.1Building a Resilient Global EV Supply Chain Amid UncertaintyRMI | Bain & Company, Inc.At a Glance `The Inflation Reduction Act continues the diversification trend and has catalyzed investment in the US electric vehicle supply chain. `Analysis suggests a sufficient supply of key minerals to meet IRA requirements for US or free-trade area sources. `However, risks include the possibility that some regional and global supply/demand imbalances will potentially exist across the EV value chain. `Amid uncertainties, building flexible strategies, transparency, and creating partnerships to derisk investments is key. The Inflation Reduction Act (IRA) has attracted more than $65 billion of investment in the US electric vehicle (EV) supply chain since it was passed in August 2022, including $49 billion for new battery and battery component manufacturing. It amounts to a massive commitment to the shift away from combustion engine vehicles and to building up domestic EV manufacturing capability, right along the supply chain. This stems from the substantial tax credits offered to drivers who buy EVs and requirements that a large share of raw materials and components must be extracted and produced in the US or in Free Trade Agreement (FTA) countries. These include Canada, Australia, South Korea, and Chile.The IRA provides tax credits of up to $7,500 for the purchase of new consumer and commercial light ve...
