Lithium manufacturers struggle to produce enough to meet the requirements of EV manufacturers. And they expect a supply shortage.
Industry of growth
Many countries around the world are trying to shift towards green energy, lower emissions of carbon and reduce dependence on oil and other imports of fuel.
Although the automotive industry is a vital part of the transformation, demand in related manufacturing industries has increased in recent times. To date, the chip shortage has stopped several manufacturers in China from Stellantis to Nio.
In addition, two of the few lithium producers are Albemarle Corporation and Livent Corp. In addition, some analysts believe prices will increase over time.
Price increases Lithium Batteries
Half costs tend to be at the battery price during the manufacturing of an EV. Companies have therefore developed battery swap technologies to offer consumers an affordable EV.
When lithium suppliers try to meet demand, prices can rise. This also leads to an increase in the price of the EV.
While there are companies working towards other options such as battery Solid State. However, lithium is at the heart of the battery industry. Every global electricity manufacturer intends to sell tens of thousands of electric vehicles by 2025. Electric cars are not just cars, but also three-wheelers, bikes and trucks.
As the world’s largest producer of lithium, Albemarle plans to double its production capacity to 175,000 tonnes. Two building projects are to be completed by the end of this year.
Billions have already been spent on production plants
General Motors, Ford, SK Innovation and LG Energy have been working on manufacturing facilities in the United States. And the US government has proposed expenditure for EV sales and infrastructure in the amount of 174 billion dollars.
He also added, “The lithium industry will have the challenge of producing enough qualified material in the near and medium term.”
In addition, Australian-based Orocobre pays $1.4 billion for a smaller Galaxy resource.
And Chris Berry, an independent lithium industry consultant,
“The next few years will be crucial for whether there are sufficient lithium supplies available, and that is why you start seeing commodity prices start to ramp up.”
Increased demand
Projections say that demand for white metals will increase from 320,000 to 1 million tonnes per year by 2025. Furthermore, the need to raise prices is to encourage producers to produce more for tomorrow (by 2025).
As Pedro Palandrani of Global X Lithium & Battery technology put it,
“The companies throughout the lithium-ion supply chain have been in the best position for the last five years.”
