Australia is the largest mining producer of lithium, but China buys 90% of Australia’s production. China turns most of its bulk lithium imports into lithium batteries for EVs and other uses such as electronics. Lithium mining and refining is a very dirty business, which is probably why US lithium production declined from 37% down to only 1% since 1995.
For what it’s worth, production of lithium batteries creates a massive carbon footprint. So if you buy one of those flashy EVs, you are already well down the carbon hole — and that may not have been your intention. It is likely you will continue dropping down that hole as you drive and recharge your EV, since most of the world’s electricity comes from burning fossil fuels and will continue to do so into the indefinite future — regardless of “green” claims to the contrary.
Elon Musk Building Lithium Battery Superfactories But is Running Behind
Elon Musk said that Tesla plans to produce at least 100 GWH/year 4680 batteries from the new Nevada factory and this could reach 500 GWH/year. This will be part of Tesla expanding 4680 battery production to 1000-3000 GWH/year. This will be in addition to batteries from other suppliers like CATL.Brian Wang’s NextBigFuture
Giant Chinese EV manufacturer BYD has grown to its huge size within China by bringing all vertical component manufacturing in-house.
In-house manufacturing of key components has become one of the biggest trends in China’s EV industry over the past year, as many automakers look for ways to reduce supply chain vulnerability amid persistent chip shortages and the surging cost of battery materials. Among them, BYD is widely seen as a role model for this vertical integration strategy: the automaker builds its own supply chain and performs most of the activities required to bring its vehicles to market.
Already the world’s second-biggest battery maker and a major domestic supplier of power semiconductors for automobiles, BYD is now looking to expand production capacity significantly and accelerate the development of new products. Founder Securities expects BYD’s capacity to increase to 445 GWh-worth of batteries to close the gap with dominant player CATL by the end of 2023.China EV War
Korean giant LG is currently either #1 or #2 in global lithium battery production. China’s CATL is also either #1 or #2 lithium battery maker globally, depending on who counts the batteries. Samsung, Panasonic, Tesla, and a few additional manufacturers from Japan, Korea, India, and the US, are the primary competitors to the Chinese giants. But since China controls most of the world’s lithium (and cobalt via Congo), Chinese manufacturers currently have the inside track to most of the world’s refined lithium production.
The cost of refined lithium has been skyrocketing over the past several years, while the cost of the lithium batteries themselves has been falling — and is expected to fall another 40% in the next few years, unless China commits suicide by invading Taiwan.
Tesla Scaling to Produce Up to 3,000 GWh of Lithium Batteries per Year
As noted in Brian Wang’s article on Tesla’s new megabattery factory in Nevada, Elon Musk hopes to produce up to 3,000 GWh capacity of lithium batteries per year, in combined Tesla output. Chinese battery maker BYD will try to do at least as well if it can, as will CATL. China intends to stay ahead of Tesla, Samsung, Panasonic, and the new Indian producers of lithium batteries.
It is a challenge for lithium battery manufacturers to procure lithium of sufficient purity and quantity to make good lithium batteries that perform well and will not catch fire and explode. As production of lithium batteries continues to rise dramatically, supplies of high quality lithium salts will become scarcer and more expensive, in a supply/demand sense.
Wars are Bad for International Mineral Markets
Russia’s senseless invasion of Ukraine in February of 2022 has led to a very expensive war in terms of economic and manpower costs for all the countries involved. The war has also impinged on multiple important global markets, including hydrocarbons, fertilizers, and minerals like cobalt, used for lithium battery manufacture. The loss of Russian cobalt further centralizes control of cobalt in China’s hands, since China controls most of the Democratic Republic of Congo’s cobalt production.
As the US signals a global reduction in international policing, we can expect more regional wars which will impinge on minerals production, and affect global markets in many other ways. But it is China’s upcoming decision whether to invade Taiwan, which will have the largest impact on the minerals utilised in lithium battery production, as well as the sheer numbers of batteries that will be manufactured and sold on global markets.
Several alternative approaches to EV battery production — including among many others sodium-ion, fluoride-ion, solid state batteries, non-cobalt batteries, and lithium phosphate batteries — will complicate the picture, and possibly create new niches for startup battery and EV makers.
Government regulations can either help dynamic markets or — more often — hamper markets considerably. In the US, the suffocating effect of tight labor and environmental laws, combined with mandates for manufacturers to utilise domestic mineral resources, will make it almost impossible for domestic manufacturers to compete with Chinese and Indian competitors — unless, of course, China goes to war.
Somewhere, a Disruptive Technology May Pop Up Anytime
Suppose tomorrow, someone in Ireland or Switzerland announced the invention and development of a new battery technology for EVs with 10 times the energy density of lithium, and 20 times the number of charge-discharge cycles, and at least 10 times the projected lifetime compared to lithium — at half the cost. If the newcomers could scale up economical production within a few years, soon all the mighty plans and investments of Tesla, CATL, BYD, and the others in the old technology, would be wasted.
That is the wonder and the tragedy of capitalism. The old must be displaced by the new, if the new is better, more affordable, safer, cleaner, and more durable.
But a flood of disruptive innovation requires an underlying society with basic freedoms, property rights, and the rule of law. Our new left radical overlords in charge of most western governments, media, academia, corporations, and other large social institutions, do not like to allow common people to have the freedoms that have brought us the sci-tech innovations of the past 200 years.
As a hobby, Elon Musk bought Twitter and made the company into a free-speech zone for the first time. That is a step in the right direction. There is still a long ways to go.
As for electric cars, there are many built-in limitations to the ability of EVs to overtake internal combustion driven vehicles. Without government mandates forcing the issue, it would take at least 20 years for EVs to become a majority mobility type. And that would require significant improvements to vehicle range, battery lifetime, charging infrastructure, and battery cost/safety.
In extreme weather, an EVs range can be cut by 50%, which is unacceptable in an already short-range vehicle. The time it takes to go any distance cross country is hell on travelers.
As for those who keep talking about battery powered aircraft for freight and passengers, you are simply ignorant of the concept of energy density and the limitations it puts on working aircraft.
The most important thing needed for a rational adoption of EVs on a larger scale, is new generation nuclear fission and nuclear fusion on a large scale to provide abundant electric power that is reliable. Those who believe that more wind & solar energy will help the situation have not done their homework, but are likely paying for their sloppy mode of information acquisition in many other aspects of their lives already.
The video below is quite optimistic about renewables, while admitting that they are pretty much crap.