Experts believe the massive increase in demand for electric cars may already make it difficult to meet global emissions targets, as both parties are counting on electric cars to get cheaper, which means more electric vehicles on the road and fewer nasty exhaust pollutants in the air.
The demand for lithium, which is used to make batteries in our electric cars, is so great, it’s outstripping supply that prices are up nearly 500% this year, according to Bloomberg.
Analysts say that could add $1,000 to the price of a new electric vehicle, stemming the fall in retail prices for electric vehicles that manufacturers are trying to make as affordable as conventional combustion-engine cars.
Bloomberg also reported that the exceptional demand for lithium can be traced back to the 2018-2020 slump, which halved its value and led to a lack of investment in new sources of supply just at the time when demand for electric vehicles was exploding. The supply of other compounds used in battery production, such as nickel, graphite and cobalt, have also been affected by the war in Ukraine, making matters worse.
Lithium is obtained either by pumping out a brine containing the metal from the ground or through mining. But both processes are not environmentally friendly and can be incredibly inefficient and slow, and production levels can be increased from existing sources. However, creating new sources takes longer.
“There is a lot of lithium in the ground, but investing in time is the issue,” said Joe Lowry, founder of consulting firm Global Lithium Consulting. “Tesla can build a giant plant in about two years, and cathode plants can be built in less time, but it can take up to 10 years to build a lithium brine project.”
Experts expected more government intervention to protect lithium supplies and even for the automakers themselves to get involved in the mining process, something Tesla CEO Elon Musk tweeted about earlier this year.
Automakers are also trying to reduce the lithium content in batteries, and some experts suggest recycling old batteries could meet 16% of annual demand by 2035, at which time new battery technology could reduce lithium demand.
But as the demand for electric vehicles prepares to take another big jump after 2030, the point at which many governments ban the sale of new combustion vehicles.