The Duty of The Sovereign
When discussing critical-mineral supply chains, it is essential to distinguish between strategic demand and commercial demand. A strategic supply chain is built to guarantee access to materials a country cannot afford to do without, especially for defence and national security purposes. A commercial supply chain is built around price, volume, profitability, product cycles, and customer demand. The problem is that defence may require secure domestic access to certain minerals, but defence demand alone often cannot carry the scale needed to justify mining, processing and refining. That scale usually comes from commercial industries. EV batteries, and automotive Original Equipment Manufacturer (OEMs) have become one of the dominant demand engines for battery-related critical minerals: global EV battery deployment is expected to rise from around 1.2 TWh in 2025 to almost 3 TWh by 2030, an increase of roughly 150% in five years. This growth is not confined to one country. In 2025, China remained the world’s largest electric-car market, Europe’s electric-car sales rose by more than 30%, Korea’s EV sales grew sharply, Australia reached around 15% EV sales share of the market, and Southeast Asia more than doubled electric-car sales. The message is not that EVs define whether a mineral is strategic. The message is that civilian electrification is becoming one of the main sources of volume behind new minerals and refining capacity. This is why OEMs and EV manufacturers matter so much in new supply-chain planning: they do not define whether a mineral is strategically necessary, but their demand often determines whether a new domestic supply chain can be commercially viable.
This is where the trap lies. A government may label a mineral strategic, but it often still needs commercial validation before it becomes financeable. That validation may come through an off take agreement, downstream partnership, or private-sector demand signals. This is not irrational; lenders and investors want evidence that the project will have revenue. But it creates an internal contradiction: the state calls the material strategic, then waits for the market to prove it is commercially sound. If a project is essential to national resilience, but its future depends on whether a commercial buyer is ready to validate the demand, then the sovereign’s requirements have already been passed through a commercial filter.
Automakers and battery manufacturers are not villains in this system. They are commercial actors. Their job is to manage cost, product risk, chemical processing choices, supplier exposure, consumer demand, margins, and shareholder expectations. If an OEM changes battery chemistry, delays an off take, chooses a cheaper supplier, lowers production forecasts, or avoids long-term price exposure, it may simply be behaving rationally within its own mandate. The failure is not that OEMs act commercially. The failure is asking commercial actors to carry a sovereign’s demand when it makes no commercial sense. National security cannot be underwritten by companies whose first responsibility is to manage consumer-market risk and loyalty to the shareholders, domestic and foreign. Commercial demands can fluctuate rapidly. EV demand and product platforms can chang, battery chemistry can be upgraded or changed completely, interest rates can affect consumer demand, OEM priorities can move, and battery makers can redesign supply strategies. A mine, concentrator, or refinery may not need to be redesigned every time this happens, but their financing, off take, product qualification, feedstock planning, utilization rate, and long-term investment can still be shaken by those shifts. If strategic mineral capacity depends too heavily on commercial demand signals, it can be delayed, underused, or financially weakened by changes that have little to do with whether the material is still strategically necessary. You cannot anchor a long-term industrial capability to a short-term consumer trend.
Governments rely on commercial demand because the alternative is politically and financially difficult. If a state truly treats a mineral as strategic, it may have to become more than a policymaker: it may need to act as buyer, guarantor, insurer, stockpiler, investor, price-floor provider, or long-term off taker. That means public money, public risk, long timelines, political accountability, and accusations of picking winners. This is why governments often encourage new mining and refining projects to secure off take agreements, frequently with EV manufacturers, battery producers, or other large commercial buyers. The off take shifts part of the risk onto the market and makes the project appear bankable without forcing the state to carry the full burden directly. The governments want strategic resilience, but they want the commercial market to carry the burden and once that happens, commercial validation can quietly replace strategic commitment.
The United States makes the demand proxy trap visible because its clean-vehicle policy ties consumer EV adoption directly to domestic battery manufacturing, critical-mineral sourcing, and supply-chain security. Under the clean-vehicle credit rules, eligible vehicles face Foreign Entity of Concern restrictions (FEOC): battery components from FEOCs are often excluded since 2024, and critical minerals extracted, processed, or recycled by FEOCs were excluded in 2025. This show that EV is not only an environmental product; it has become a supply-chain policy instrument. This also indicates that governments’ plan to promote electric vehicles might be more than climate concerns. The strategy makes sense because EVs create the civilian demand volume that can help justify domestic mineral and battery capacity. But it also reveals the trap: if EV demand weakens, Original Equipment Manufacturer (OEM) strategy changes, or battery chemistry shifts, the commercial base supporting strategic mineral projects can weaken while the national-security need remains.
The solution is not to exclude the market. Commercial buyers are necessary because they create volume, manufacturers create new demands, refiners create capability, and long-term off takes can help create bankability. But the state must stop pretending that the commercial chain alone can carry sovereign responsibility. If a mineral is truly strategic, governments need tools that create continuity beyond ordinary market demand: sovereign purchasing, government-backed off takes, usable stockpiles, price-support mechanisms, demand aggregation, direct investment, or guaranteed refining throughput. A strategic supply chain can use commercial demand, but it cannot be hostage to it.
Kiana Kianara
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