Western battery companies, car makers, and governments have failed to develop adequate sources of lithium, leaving auto companies unable to meet the surge in demand for electric vehicles (EVs), Stuart Crow, chair of Australian mining company Lake Resources, said in a Financial Times interview.
Lithium is the central element in the batteries that power EVs.
“There simply isn’t going to be enough lithium on the face of the planet, regardless of who expands it and who delivers it,” he said. “It just won’t be there.”
“Car makers are starting to sense that battery makers aren’t going to be able to deliver,” he added.
Chile holds about 42 percent of the planet’s lithium deposits, followed by Australia with 26 percent, Argentina with 10, China with 7, and the U.S. with 3.5 percent.
However, China has about 80 percent of the world’s capacity to process and refine lithium into the form that batteries use.
“The West has been remarkably slow to adopt a strategy to secure a supply chain,” Crow noted.
It now is “impossible for EV [production targets] being made by either governments or car makers to be met,” analyst Daniel Morgan at Barrenjoey, an Australian investment bank, told the FT.
“There’s a great love for throwing out lofty targets, but…it’s not going to happen,” he said.
The lithium market will fall 50,000 tons short of demand in the near term, Crow projected, and the deficit could reach as high as 400,000 tons in a few years.
The lithium industry now produces about 450,000 tons annually, he noted.
“We hear stories of two very large battery makers [each] trying to source 150,000 tons of lithium this year,” he said. “With 450,000 tons of supply, it’s not going to happen.”
Lake Resources is establishing a lithium mine in Argentina that will begin yielding 50,000 tons of lithium ore by 2025. However, Lake began the project in 2015, an indication of how long it takes to bring a new lithium mine into production—10 years, in this case.
The Biden administration has set a target of half of all cars made in the U.S. by 2030 being electric. The European Union has proposed banning internal-combustion-engine vehicles by 2035.
Ford, General Motors, Stellantis, and Volkswagen are among car companies that have set dates by which to make only EVs.
The world’s demand for lithium, which also powers batteries that run smartphones and other devices, will grow by as much as 35 percent annually for the next decade, according to mining company Rio Tinto.
Producing 28 million lithium-powered EVs each year in 2030 would require lithium production to grow sixfold by then, Barrenjoey’s Morgan told the FT
“We need to start hearing about new projects now,” he said.
The looming shortage means that batteries, which can make up as much as 40 percent of the cost of an EV, are set to rise again after falling for a decade.
The average cost of an EV’s lithium-ion battery pack plummeted 90 percent from 2019 through 2020, diving to $132 per kilowatt-hour last year, according to BloombergNEF.
This year, however, battery packs will cost about 10 percent more, Benchmark Mineral Intelligence believes, while consulting firm Wood Mackenzie sees a 20-percent jump.
TREND FORECAST: The impending shortage of lithium is not news to vehicle makers or battery companies. As we have been reporting for some time, both are at work developing new battery chemistries that reduce the need for lithium
Tesla’s 4680 battery, which we described in (5 April, 2022), uses less lithium than today’s conventional EV batteries and is about to enter commercial production.
Also, solid-state batteries show an ability to slash the amount of lithium without costing power or battery life, as we reported in our “Special Report: How and When Electric Vehicles Will Go Mainstream” (21 Sep 2021).
Whether EV makers can reach their goals depends on how quickly these and other alternative battery technologies can come to the market.

Skip to content