V. Roy, F. Zhao
Purdue University,
United States
Keywords: Critical materials, AI-driven traceability, Foreign Entity of Concern (FEOC) regulations, lithium-ion batteries
Summary:
Battery and solar manufacturers face increasing pressure to verify supply chain origins under Foreign Entity of Concern (FEOC) regulations, with billions in manufacturing tax credits (Section 45X, 48E) dependent on demonstrating material provenance. Most critical minerals—lithium (70% refining), graphite (99% processing), rare earth elements (90%)—remain concentrated in restricted jurisdictions, yet manufacturers lack visibility into embedded materials within tier-1 component specifications. A framework combining component-to-material mapping with graph-based supply network modeling and AI-driven supplier discovery enables tracing critical materials from Bills of Materials through multi-tier networks. The system identifies likely processing locations and ownership structures for each material, providing company/facility-level tracking needed for FEOC compliance verification. Analysis of NMC811 batteries reveals component-level dependencies (3.4 kg critical materials/kWh) and identifies supply bottlenecks where domestic alternatives are limited or nonexistent—graphite processing shows 99% import dependency with zero operational US suppliers for key battery components. The framework quantifies FEOC exposure by material cost contribution rather than weight, enabling manufacturers to prioritize alternative sourcing strategies for tax credit qualification. Applications span regulatory compliance verification ($35/kWh battery credits) and supply chain resilience planning through domestic supplier capacity assessment.