The 500% increase in the price of lithium will make electric vehicles more expensive and could compromise the goals of decarbonization and energy transition. New battery technology won’t arrive until 2035.
The growing pressure to reduce fossil fuel consumption and decarbonization is leading the automotive industry to focus on the production of electric cars and their acquisition by consumers.
Everything indicated that electric cars would become cheaper, contributing to an increase in the car park and a reduction in the emissions of pollutants harmful to health.
Lexus UX300e battery
If this makes sense at a purely academic level, in reality it may be difficult to achieve due to the impact of the increased demand for raw materials for the production of components for the production of electric vehicles.
One of the raw materials used in the manufacture of current electric car batteries is lithium and its price has increased by about 500% in just one year, according to Bloomberg.
What’s more, analysts believe this could increase the cost of a new vehicle by around $1,000 (930 euros), bucking efforts by manufacturers to bring prices down to levels similar to conventional internal-combustion engine vehicles.
They rose to 6.6 million. Electric car sales double in 2021
Bloomberg reports that the exceptional demand for lithium follows a halving of its price between 2018 and 2020, which led to a reduction in investment in new sources of supply and at the exact moment when an “explosion” took place. in the search for electric vehicles.
In addition, the supply of other components used in the production of batteries such as nickel, graphite and cobalt was affected by the war in Ukraine, aggravating the situation.
Lithium can be obtained by extracting lithium brine or by mining it. However, both processes have environmental impacts and can be inefficient and very slow, as it is difficult to increase production from existing sources. The search for new sources, as seen in Portugal, is shrouded in controversy and also takes a long time.
“There’s a lot of lithium in the ground, but timely investment is the issue,” says Joe Lowry, founder of consulting firm Global Lithium. “Tesla can build a gigafactory in about two years; cathode plants can be erected in less time, but it can take up to ten years to build the project for a “green” lithium brine field.
Experts believe there will be more government intervention to protect lithium sources and even car manufacturers themselves may be involved in the mining process, something Tesla CEO Elon Musk has already confirmed.
Manufacturers themselves have been looking at how much lithium is in batteries, and some experts suggest that recycling old batteries could account for around 16% of world demand by 2035, when new battery technology could reduce demand for lithium.
New generation will be solid batteries
But as demand for electric vehicles is expected to increase substantially from 2030 onwards due to the ban on the sale of new internal combustion vehicles in many countries, recycling old batteries will not be enough. “There just aren’t enough batteries now to be recycled,” says Ken Hoffman, a senior expert at McKinsey, in statements to Bloomberg.