U.S. Ambassador to Korea Philip Goldberg, front row center, and POSCO Future M CEO Yoo Byeong-og, front row left, inspect the company's anode materials plant in Pohang, North Gyeongsang Province, Monday. Courtesy of POSCO Future M
POSCO Future M has informed U.S. Ambassador to Korea Philip Goldberg of a setback in its business primarily due to the U.S. government's decision to give a two-year grace period regarding the Foreign Entities of Concern (FEOC) restrictions under the Inflation Reduction Act.
The restrictions reject subsidies for the purchase of electric vehicles (EVs) equipped with batteries containing critical minerals from certain foreign entities, such as China.
The battery materials producer said Tuesday that CEO Yoo Byeong-og called for consistency in U.S. government policies during the ambassador's visit a day earlier to the company's anode materials plant in Pohang, North Gyeongsang Province.
Before Washington decided in May to keep subsidizing the purchase of EVs equipped with batteries using Chinese graphite until the end of 2026, POSCO Future M's products had been expected to replace anode materials from Chinese companies, which have dominated the global market.
As a result of the decision, however, POSCO Future M has suffered worsening profits in its anode materials business and reduced its capacity utilization, although domestic battery manufacturers welcomed the decision, which allowed them to keep using low-priced Chinese graphite for a while.
“Even though POSCO Future M is the only option to stabilize the U.S. anode materials supply chain, we have been facing difficulties due to the delayed FEOC restrictions,” Yoo said.
The ambassador spoke about the importance of building supply chains that are not dependent on any one country or subject to unfair trade practices, according to the U.S. Embassy in Seoul.
In February, POSCO Future M's executives met with U.S. Under Secretary for Economic Growth, Energy and the Environment Jose Fernandez in Seoul to introduce its battery materials for the U.S. government's efforts to stabilize supply chains for EV batteries and critical minerals.