If critical elements such as lithium fail to keep pace with demand, the electric car revolution will stop in the West. This raises the price of the battery, lowers the margins, and the required $ 100 per kilowatt-hour, affordable green vehicles will be available at the launch.

“Western weaknesses in the lithium-ion supply chain will reduce the adoption of electric vehicles and dominate China’s EV market,” the report from Globladdata said. Major Information and Analysis Company.

This type of pressure can also delay Tesla.

TSLA
He has long promised a “reasonable” $ 25,000 electric car.

By 2026, EV’s production is expected to reach 12.76 million cars, with more than half coming from China.

“As the price of lithium rises in the next decade, the battery costs of the EV sector in the West will have to increase.

The International Energy Agency (IAA) estimates that growth in EVs will increase the demand for lithium by 40 times by 2030, according to the International Lithium Association (IAA). Last year, the demand for lithium was about 320,000 tons and is expected to reach 1 million by 2025 and 3 million by 2030, Reuters reported.

Earlier this month, LMC Automotive’s European EV sales were projected to grow from 1.2 million in 2021 to 3.4 million in 2024, 6.1 million in 2027 and 10.5 million in 2030.

As world leaders rush to deliver on green energy promises, says US investment newspaper Energy and capital partner Luke Sweeney.

“They (the leaders) ignore the trillions of elephants in the room. You can’t live without carbon-free energy and fuel-free transportation. Currently, production is not even close to continuing. We simply do not produce enough lithium to meet the target demand, ”says Swini.

Daniel Clark, China Global Global Analyst By 2020, it will have 80.5% of the world’s lithium-ion battery capacity, and despite the best efforts of the United States and the European Union, it will still dominate by 61.4% by 2026.

“The increase in the price of lithium has been warned by some people in the industry for some time. The gap between supply and lithium demand is widening.

The average price of lithium carbonate has fluctuated – it has halved before doubling again, and this has made investors cautious about investing in new potential.

“Batteries are the most expensive part of EV. To start the main product, the cell costs, in particular, should be less than $ 100 per kilowatt, but this does not seem to be the case. Any increase in prices will lead to the demise of the decarbonation agenda for improved economies, as well as a reduction in the carbonization of the car industry, Clark said in the report.

In an online interview, I asked Clark if lithium prices were still possible for LMC Automotive Europe EV sales targets.

Between 2022 and 2024, the price of lithium has been increasing depending on automobiles. (Manufacturers) must decide whether to take the cost or transfer it to the user. The market is growing more and more. As a result, manufacturers with very deep pockets, such as Toyota, can take over the market by buying the battery and reducing their competitors; This will have to increase the price. The EV market, which focuses on premium cars, may not hurt Tesla, but they will reconsider their plans for the low-cost $ 25,000 Tesla Model 2.

Clark lithium represents about 7% of the total battery value but you need graphite, manganese, nickel, cobalt. The latter two prices are also very risky due to supply issues.

“Cobalt is used in the cathode, and the cathode is the most expensive part of the battery, which in turn is the most expensive part of the EV.

Is the 100 kWh battery per hour now dangerous?

It is very difficult to say. Recent reports are priced at $ 105 per kWh but are expected to increase next year due to the above-mentioned forces. Lithium deficiency will worsen next year and could continue for up to half a decade. It is important to remember that lithium mining takes seven years and many cars require high quality batteries. Mines are big investments, like chip factories, there isn’t much room to increase capacity – they work day and night for any mines, ”Clark said.

Like ILiA, natural lithium minerals are relatively abundant and are found in many countries. There are currently large industrial operators in Australia, Chile, Argentina, Bolivia, China, Brazil, Zimbabwe and Portugal that produce large quantities of lithium raw materials, although this number may increase as demand increases. Experts say that the conversion processes needed to produce lithium are stunted. Plants take years to get a full crop and this, combined with an increase in demand, makes supplies more robust and costly.

The big car and SUV manufacturers are rushing to make deals to guarantee supply. Tesla has an agreement with North Carolina Piedmont Lithium. General Motors

G.M.
He is investing in a California project. It is known that companies such as Stellantis, Renault and BMW are investing in projects that will speed up the conversion process. It is easy to imagine that every automotive operator is doing the same thing.

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