A proposed flat-rate tax on lithium produced in California’s Salton Sea region will delay deliveries of the electric vehicle battery metal to General Motors Co and Stellantis NV and may push some mining companies to exit the state entirely, industry executives told Reuters.

The brewing tension comes as America’s largest state is trying to position itself as a leader in the green energy revolution and as supplies of lithium have failed to match surging demand amid the push to phase out gasoline-powered vehicles.