As 2022 attracts to an in depth, the value of lithium-ion kind batteries has gone up for the primary time in additional than a decade, with surging uncooked materials and transport prices driving the fee hike, and rising demand set to problem the automobile business’s efforts to realize value parity with fossil gasoline powered (ICE) automobiles.
“Amidst these value will increase for battery metals, giant battery producers and automakers have turned to extra aggressive methods to hedge in opposition to volatility,” mentioned Evelina Stoikou, an power storage affiliate at BloombergNEF, “together with direct investments in mining and refining tasks.”
One firm that’s seemingly method forward of the curve on that is, after all, Tesla. Its controversial CEO Technoking, Elon Musk, mentioned in an August earnings name, “I’d wish to as soon as once more urge entrepreneurs to enter the lithium refining enterprise. The mining is comparatively straightforward, the refining is way tougher.” Musk went even additional, saying that, “You’ll be able to’t lose (with lithium refining), it’s a license to print cash.”
In China, the world’s largest auto market and a key area for Tesla, lithium costs have gone up by greater than 450% this yr. China maintains greater than 50% of the worldwide lithium refining capability right now, however different international locations, like Chile and Canada, are pushing forward to extend their capability, as nicely.
That push means that there’s rising demand for EV battery supplies, however not essentially a rising provide. Charles Morris, over at EVANNEX, wrote, “Some business specialists are making dire predictions of looming shortages of essential minerals. One exec at a battery producer not too long ago informed me that, whereas it would solely take two years to construct a battery gigafactory, it takes at the least eight years, and generally far more, to deliver a brand new lithium mine into manufacturing.” (Emphasis mine.)
He continues, including that, “commodities analysts have additionally been sounding warnings about provides of graphite, nickel, cobalt and a protracted listing of specialty supplies which can be wanted for (EV battery manufacturing).”
What’s the takeaway right here? It’s onerous to say, however you possibly can’t ignore that there’s a variety of important uncertainty about when EV battery costs will come down, and for those who’ve obtained your fingers on a pleasant lithium deposit, you stand to make a complete buttload of cash!
Sources: Monetary Instances, EVANNEX.
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