There is so little lithium that electric car brands are already considering mining or importing it themselves

There are several reasons why the electric car is still expensive. Beyond the comparison with the benefits (in autonomy) with a combustion vehicle and that the supply for the production of cars exceeds the demand, which favors selling more expensive vehicles and, in the eyes of the administrations, clean, there is a detail that cannot be overlooked: the price of lithium. This component is driving companies to desperate measures.

not enough lithium. It is something that has been reported for several years but whose problem has worsened this year. There is not a sufficient supply of lithium to power all electric car batteries. Added to the constant supply problems, this raw material has skyrocketed its price. So much so that between January 2021 and the same month of 2022 it has quintupled its price.

risks. With the price of lithium soaring, hysteria has gripped the markets for months, with large manufacturers making panic purchases that have resulted in… a higher price of lithium. A vicious circle that cannot be solved unless lithium production is increased. And, despite everything, opening a lithium factory is a process that takes years and that, in Europe, raises great doubts due to its high environmental impact, as is already the case in Extremadura, where there is one of the largest deposits on the continent.

old promises. With the supply chain broken, manufacturers have started to move and take desperate measures. An example is the message that Elon Musk sent through Twitter this same month of April: if the price of lithium does not drop, Tesla will have no choice but to mine it. And it is that, despite the high costs of this type of installation, the current high prices could compensate for the “I cook it, I eat it”.

Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.

There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.

— Elon Musk (@elonmusk) April 8, 2022

Despite everything, it must be remembered that this is not the first time that Elon Musk has pointed in this direction. Already in 2020 there was speculation about this possibility, when the company announced that it had a land of about 4,050 hectares for the exploitation of this mineral. In 2021, he patented a system for its selection and separation of other metals.

they move. Tesla is not the only company that has moved into the market with the intention of lowering costs. In November 2021, it reached a three-year agreement with Ganfeng Lithium, the world’s largest supplier of Lithium, with the aim of guaranteeing this mineral.

Also at the end of 2021, Volkswagen positioned itself as one of the priority lithium buyers until 2026 from Vulcan Energy, a company that wants to exploit a deposit next to the waters of the Rhine River. General Motors is one of the main investors for the extraction of lithium in California and BMW has opted for the same strategy in Argentina, one of the countries with the most lithium in the world.

without intermediaries. The ultimate goal of these moves is obviously to cut out the middlemen and guarantee years of lithium supply. Mercedes has also been one of the firms that has opted for this strategy but, in addition, it has announced that it is going it alone in the production of batteries and motors for electric cars, which will force it to go out on the market in search of land rare and other essential metals, such as nickel.

Temporary. Investment in lithium extraction mines and priority agreements are, as we have seen, the main strategies that firms have chosen. And, given the high cost of starting a lithium mine, it makes sense. Also, keep in mind that a newly built mine takes years to produce the expected volume of product.

By then, manufacturers are betting on the production of solid-state batteries, a structure that reduces dependence on lithium, which promises much greater autonomy and less degradation.

Photo | Doc Sears