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WardsAuto Podcast: Supply and Pricing of Lithium Key To EV Growth

Episode 2 of the WardsAuto Podcast focuses on battery technology, the growth rate of EV and the supply of lithium.

The world is undergoing a transformative shift toward sustainable transportation, with electric vehicles at the forefront of this revolution. As industries strive to reduce their carbon footprints and combat climate change, the importance of lithium cannot be overstated.

Lithium, which the global industry depends on as the key component in the batteries that power EVs, plays a pivotal role in enabling their widespread adoption and propelling the growth that governments and companies are planning around.

In Episode 2 of the WardsAuto Podcast, Host David Kiley and Wards Intelligence battery technology analyst Adam Ragozzino discuss battery technology, the supply and pricing trends of lithium, and the politics and possible future alternatives to lithium. Their guest is Cameron Perks, principal lithium analyst at Benchmark Mineral Intelligence. WardsAuto is amid its first podcast series delving into different aspects of the transition from an internal-combustion-engine industry to one centered on electrification.
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Lithium-ion batteries have emerged as the preferred energy storage solution for EVs due to their high energy density, longer lifespan and quicker charging capabilities. These batteries are essential for powering electric vehicles, providing the necessary range, performance and efficiency required for mainstream acceptance. Lithium, in the form of lithium carbonate or lithium hydroxide, is a vital component of these batteries, comprising a significant proportion of their cathode.

The planned rise of electric vehicles has led to an exponential increase in the demand for lithium. According to Perks, the industry will see a balanced market for lithium – supply meeting demand – in 2024, a balance that is forecasted to stay in place for a couple of years.

Managing the Surge

There is an expected surge in EV demand between 2028-2035 as the charging infrastructure in the U.S. matures, expands and becomes more reliable, and we move closer to mandates for zero-emission vehicles. More lithium mining and processing is coming online all the time. Besides reliable suppliers of lithium feedstock coming from Australia, Chile, Argentina, the U.S. and a few other locations, new mines have opened up in Zimbabwe, while China remains the leader in lithium processing. Japan and South Korea are also lithium processors and the U.S. has cut deals with both countries so as not to be overly dependent on China.

Investments in mines can take 15 years to begin paying off, says Ragozzino. That’s how long it takes, he says, to open a new mine for production. An obstacle to building lithium processing plants in North America is labor. There is a huge demand for skilled labor in the U.S. for the new battery and auto assembly plants being opened, as well as for any new processing plants. “But we don’t really make new miners in this country,” says Ragozzino.

Furthermore, ongoing R&D efforts are focused on improving lithium extraction techniques and battery technology. Innovations such as solid-state batteries, sodium-ion and lithium-air batteries aim to enhance energy storage capacity, safety and reduce dependence on limited resources. These advancements, alongside the scaling up of lithium production, are critical for meeting the future demand of the EV market.

In other words, just saying you are adding mines or processing plants for lithium batteries does not guarantee supply. Perks says he is very conservative about forecasting lithium supply because his firm insists on seeing the mines, production and processing and verifying in person that companies and governments are telling the truth about the supply.

You can find Episode 2 of the Wards Auto Podcast on all the major podcast platforms: Spotify, Apple Podcasts, Pandora, Stitcher, etc.

You can find Episode 1 and Episode 2 of The WardsAuto Podcast at this link.

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