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Benchmark’s flagship GIGA US 2025 event wrapped up this week in Washington DC, at a pivotal time for the US electric vehicle and lithium-ion battery industries.
The focus of this year’s discussions shifted to navigating rising uncertainty, as the prospect of reduced federal support threatens to derail the US clean energy boom. Concerns are mounting that a rollback of Inflation Reduction Act (IRA) subsidies will not only remove support for US midstream and especially downstream projects, but also weaken key battery demand drivers in the US market, which will not be compensated for by other sectors.
In this article, Benchmark Source explores the major themes and talking points that emerged over the course of the week.
EV sales growth is strong, but US market faces headwinds
Despite prevailing macroeconomic uncertainty, optimism persists around the trajectory of global EV adoption. Benchmark’s Head of Research, Adam Panayi, reported that global EV sales were up 30% in the first four months of 2025.
It was underscored that this growth, however, varies significantly by region. China continues to lead with 30% growth, and Europe has bounced back from a difficult 2024 to post growth of 25%. By contrast, the US market has been sluggish, with sales growing just 5.5%.
“The situation in the US is difficult,” Panayi noted. “Environmental Protection Agency (EPA) and California Air Resources Board (CARB) emissions policies are likely to be softened, which have historically been key growth drivers. At the same time, the winding down of IRA tax credits is adding cost pressure to an already uncompetitive market.”
Nevertheless, reasons for optimism remain. General Motors is making positive strides in the EV sector, while Tesla, despite intensifying Chinese competition, continues to lead globally in innovation and scale.
Copper and Rare Earths: the most critical of minerals?
The conference spotlighted two of the most strategically important raw materials for the energy transition: copper and rare earth elements (REEs).
Although copper is facing short-term pressure from macroeconomic and trade policy uncertainties, the red metal is being underpinned by strong long-term demand fundamentals. Demand is set to outpace historical trends on the back of the proliferation of AI data centers, renewable energy infrastructure, and electrification efforts converge.
Yet supply growth is slowing due to mining cost inflation and weak investment returns, laying the groundwork for a period of sustained upward pressure on prices.
Meanwhile, supply risks in the REE market are more acute, as China has demonstrated its willingness to weaponise its dominance over these supply chains as global trade tensions heighten.
Panellists warned the current REE price environment is too low to support supply chain development outside of China, highlighting that the cost of losing access far outweighs the cost of securing new supply. This was illustrated by the fact that a rare earth permanent magnet (REPM), critical to EV performance, costs less than a set of tires.
It was noted that stronger policy and downstream support was necessary to incentivise higher prices, or the US and its allies risked prolonged dependence on China.
Refining capacity the key bottleneck for North America recycling industry
Progress is being made to build out a North American battery recycling industry, but a critical lack of black mass refining infrastructure in the region is a key bottleneck. This is forcing recyclers to export of black mass to other markets, primarily in Asia.
While both Europe and North America now have surplus pretreatment capacity, Benchmark data shows a persistent deficit in black mass refining. Even when material is processed domestically, other bottlenecks, such as the lack of midstream precursor refininers, mean battery chemicals often must still be exported.
To address some of these challenges, panellists emphasised the need for targeted R&D investments to build technical expertise and accelerate the development of a fully integrated recycling and refining ecosystem.
LFP makes gains in the US, but sourcing challenges a risk
A notable theme throughout the conference was the rapid expansion of LFP cell production ambitions in the US, reflecting a marked demand shift toward the more cost-effective battery chemistry in Western markets. It was noted ongoing innovation in 4th generation LFP and enhanced pack density is allowing traditional LFP to maintain competitiveness to nickel-based alternatives and expand market share.
This increase in domestic demand is putting pressure on US cathode manufacturers to scale up and localise LFP supply chains. At the same time, interest in alternative blends like LMFP (Lithium Manganese Iron Phosphate) continues to grow due to performance benefits, though consensus suggests they will likely be adopted as blends rather than stand-alone chemistries.
However, material sourcing remains a challenge. While securing lithium carbonate and phosphate from outside China is increasingly viable, manganese remains a strategic vulnerability, due to nearly all high-purity manganese sulphate processing capacity being controlled by China.
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