Car manufacturers and consumers are rushing to make and buy EVs. Both sides are banking on making electric cars cheaper, which means more EVs on the road and less pollutants in the air, or at least that’s the theory. However, experts believe that the huge increase in demand could actually make it harder to meet global emission targets.
Because we need lithium for our electric car batteries, and the demand for the mineral has surpassed the supply so much that prices have risen by almost 500 percent in one year. Bloomberg. And analysts say it could add $ 1,000 to the price of a new EV, which could stem the fall in the EV’s retail price, which manufacturers are trying to bring down to a level that makes them as affordable as conventional combustion-engined cars.
Bloomberg Reports that exceptional demand for lithium could be marked by a recession in 2018-20 that will halve its price and lead to lower investment in new supply sources at a time when EV demand is exploding. And the supply of other compounds used in battery production, such as nickel, graphite and cobalt, has been affected by the war in Ukraine, making matters worse.
Lithium is either pumped or mined from the soil. But both processes can be environmentally friendly and inefficient and incredibly slow, as they can increase production levels from existing sources. Establishing new sources, however, takes longer.
Related: California has a single lake with more lithium than the country currently needs
“The land is rich in lithium, but there are problems with timely investment,” said Joe Lori, founder of the advisory firm Global Lithium. “Tesla could build a gigafactory in about two years, the cathode plant could be built in less time, but it could take up to 10 years to build the Greenfield Lithium Brine project.”
Experts predict more government intervention to protect lithium supplies, and even automakers to get involved in the mining process, Tesla chief executive Elon Musk tweeted earlier this year.
Lithium prices have gone insane! If the cost doesn’t improve, Tesla may actually have to dig and refine directly.
Lithium is found almost everywhere in the world, but the rate of extraction / purification is slow.
– Elon Musk (lonelonmusk) April 8, 2022
Car manufacturers are trying to reduce the amount of lithium in batteries, and some experts suggest that recycling old batteries could meet 16 percent of annual demand by 2035, a time when new battery technology could reduce demand for lithium.
But as the demand for EVs prepares for another big jump after 2030, to the point where many governments are declaring the sale of new ICE cars illegal, not everyone agrees that recycling old batteries will suffice. “Basically, there aren’t enough batteries to recycle right now,” said Ken Hoffman, a senior McKinsey expert. Bloomberg.