California Goes Ahead With Lithium Tax Despite Protests From EV Suppliers

  • California has approved a plan to tax the electric vehicle battery metal lithium to generate revenue for environmental remediation projects, Reuters reports.
  • The tax is structured as a flat-rate per tonne and will go into effect in January. 
  • Funds generated from the tax will help restore the Salton Sea region from damage in the 20th century.
  • Governor Gavin Newsom, a Democrat, approved the tax as part of a must-pass state budget amid divided opinions from the industry over its repercussions.
  • Mining executives acknowledged that extracting lithium from the region was expensive and could force them to move to other states with large deposits of lithium-rich brines.
  • Lithium industry executives supported the mitigation efforts but preferred a 2% or less of their sales levy. They saw a flat tax as economically destructive.
  • Lithium-ion batteries are the most common battery type used in modern EVs. These batteries have higher energy density versus lead-acid or nickel-metal hydride batteries. Their compact size made them ideal for the automotive industry. 
  • Two of the area's three lithium companies warned the tax would scare off investors and customers. The suppliers of General Motors GM and Stellantis N.V. STLA highlighted the possibility of leaving the state for lithium-rich brine deposits.
  • Price Action: GM shares closed lower by 4.95% at $31.80 on Thursday. STLA shares traded lower by 1.29% at $12.20 in the premarket on the last check Friday.

Posted In: BriefsGovernmentNewsRegulationsTechMedia

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.