In March we wrote about how electric trucks are already moving freight in Europe. And these vehicles are poised to become far more common in the United States. But as demand for electric vehicles surges, there’s a problem on the horizon: producing enough lithium for all of those batteries.
Lithium is a soft metal that is a key component in batteries. Not just batteries for electric cars, either. Cell phones, laptops, power tools, solar chargers, and mobility equipment like electric wheelchairs all use lithium batteries.
The United States Geological Survey estimated that the world has enough lithium to sustain us for 365 more years. This may sound sufficient. But the USGS’s experts made that assessment in 2015. And they based it on global lithium consumption at that time.
Since then, there have been big changes in the electric products market.
California Leading The Electric Vehicles Charge
Some states are doing everything they can to encourage consumers to buy electric cars.
California spent $449 million in consumer rebates over seven years to push consumers to purchase zero-emission vehicles. But that effort fell short. Under that scheme a buyer could’ve expected a rebate of about $2,500 for an electric vehicle. But that wasn’t enough for most consumers, and so sales of electric cars stagnated.
Now California lawmakers are trying again. In August they announced a new plan to fund $3 billion in rebates. This proposal will push the rebate for a compact electric car up from $2,500 per vehicle to $10,000. This higher incentive would make the cost of an electric car equivalent to a comparable gas-powered model.
Mine Versus Brine
The expected surge in electric vehicles is leaving lithium producers scrambling to keep up.
Lithium is extracted from the earth’s crust using one of two methods. The first is traditional rock mining. But the cost of this method is high – up to $6,000 per ton.
The second method is extracting lithium using brine ponds. The system works this way: a brine solution is pumped into ponds, and then the metal is harvested after the water evaporates.
Brine extraction is far cheaper, only costing up to $3,800 per ton. This method is especially popular in Argentina and Chile, where there are huge lithium deposits running through the Andes Mountains.
But lithium mining in South America is sensitive to disruption. Because of bad weather and technical problems, production at one facility in Argentina was 21% below target as of June. And because lithium production is still a fairly new market, funding for more of these brine pond operations in South America is erratic.
United States Lagging Behind
Big lithium producers like Argentina, Chile, and Australia are ahead of the game in exploiting their countries’ reserves.
The United States has been slow to get into the game. The USGS estimates that the U.S. has 36 millions tons of lithium carbonate. But not all of it can be economically mined yet. And as of 2016 there was only one operating lithium mine in the U.S.
The United States isn’t the only country making a push for electric vehicles. The market is poised to boom in China and India, too. And the demand for batteries for all of those smartphones and laptops isn’t going away any time soon.
With the world’s consumption of lithium set to rise, producers will have to step up their game. Not only must they increase production using the standard mine and brine methods, they’ll have to invent new systems for extracting lithium that’s currently inaccessible. But with demand for lithium only set to grow, producers have more than enough incentives to innovate.
Once we solve our lithium problem, though, there’ll be another one for the electronics industry to tackle. What to do with all of the used batteries?
Need workers? Learn more about partnering with Spec here.