The electric car revolution will stall in the West if supplies of crucial battery elements like lithium fail to keep up with the forecast huge increase in demand.
As with most manufacturing and industry, China currently dominates the battery processing market too, and it is responsible for about 80% of global battery chemical refining capacity.
A possibly overlooked supply problem by the Biden administration especially considering President Biden just outlined a plan for 50% of new car purchases to be zero-emissions by 2030.
Lithium is a mineral that is key for electric car batteries. The pricing for it continues to rise in price, which is jeopardizing the ongoing transition to renewable energy outlined by Western governments. The cost has skyrocketed more than 250% over the last 12 months, hitting its highest level ever, according to an industry index from Benchmark Mineral Intelligence.
The International Energy Agency (IEA) has estimated that the growth in EVs could see lithium demand increase by over 40 times by 2030, according to the International Lithium Association (ILiA) . Last year lithium demand was about 320,000 tonnes and is expected to hit 1 million by 2025 and 3 million by 2030, according to Reuters.
“It’s like being in a hot real estate market,” Lithium Americas CEO Jon Evans told The Wall Street Journal. “There’s a mad scramble.”
The average cost of an EV battery pack fell to $157 per kilowatt hour, a measure of energy capacity, in 2021, the Department of Energy said in October. That means a typical EV battery is between $6,000 and $7,000, a BloombergNEF analysis showed.
Battery costs would need to come down to $100 per kilowatt hour for overall EV prices to compete with traditional internal combustion engine cars, according to Bloomberg.
Lithium Americas has proposed to mine lithium on a dormant volcano in Nevada. However, the firm has yet to mine any lithium due to pushback from environmentalists and ongoing lawsuits related to allegations that the federal government approved the company’s mining permit too quickly.
If the mine begins production, it could help reduce U.S. reliance on foreign lithium and increase supplies at a time when demand for the mineral is surging.
The U.S. has roughly 750,000 metric tons of lithium that can be mined, but it produces very little and imports tens of thousands of metric tons worth from Argentina, Chile, China and Russia, according to the United States Geological Survey (USGS).
On the bright side, the $7,500 tax credit for zero-emission vehicles, which is included in the stalled BBB spending bill, might not be necessary after all. There is no reason to offer huge incentives to get drivers to go all-electric when there might not be enough inventory to keep up with the batteries/autos available for sale.
If so, this could be another major failure by the Biden administration.
Fortunately for them, it will be a decade before the effects of their poor management will be fully known, and most of them will no longer be on Capitol Hill to have to answer for it.
This story syndicated with permission from Eric Thompson – Trending Politics
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