EV dreams might go off the road due to rising lithium prices
Experts said that the price is likely to rise and more investment will be needed in production to meet the EV supply chain
The price of everything required in electric vehicles (EV), starting from semiconductor chips to copper and aluminium was already on the rise, thanks to the worldwide pandemic that disrupted the supply chain of these essential raw materials.
And now, the price of lithium, a metal found in every commercial electric battery, is also rising.
Experts said that the price is likely to rise and more investment will be needed in production to meet the EV supply chain, reports The Telegraph.
There are, obviously, alternatives such as sodium. But they are years away from mass manufacture. In the meantime, demand will only grow.
New mines will take years to develop and some countries are already promising to stop the sale of petrol and diesel engines amid a push towards a greener economy, for example, Britain by 2030.
Benchmark Mineral Intelligence, a pricing and analysis firm, estimated that the price hike of lithium carbonate could push up the production cost of electric batteries by 16% or even more.
According to figures from Benchmark, the price of lithium carbonate, which is often used to make cheaper electric cars, is up 289% so far this year to about $24,000 per ton.
This in turn means bad news for the Bangladesh car market, as EVs are likely to get more expensive.
Meanwhile, the price of lithium hydroxide, used in longer-range motors, is up 192% to about $26,000 per ton.
Among the two, lithium carbonate started to be more widely used by EV makers, which turned its rising costs into a headache.
It is used to make lithium-iron-phosphate (LFP) batteries that do not need cobalt, an element found largely in The Democratic Republic of Congo.
Tesla already told customers in October to expect more LFP batteries in its standard-range models.
Globally, carmakers are committing to spend billions of dollars on EVs, and all of these carmakers will require thousands of tons of lithium to do so.
Fiat and Vauxhall owner Stellantis, this July, committed to spending around $34 billion on EV and software development in the next four years.
Meanwhile, Nissan announced last week that it will spend around $17 billion to decarbonise by 2050.
While a gigafactory can be built in a couple of years, it will immediately need a source of the metals required.
A new mine, however, requires five to seven years before the production can begin.
Benchmark’s Chief Executive Simon Moores told Telegraph that the mine must also produce a certain quality of the commodity, which can slow things down further.
As of now, Australia is the biggest producer of lithium, mining almost half of the world’s lithium in 2020, according to US Geological Survey (USGS).
The second position belongs to Chile, which holds the largest reserves.
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