Lithium, a vital mineral for electric car batteries, continues to climb in price, endangering Western governments’ plans to switch to renewable energy. A Benchmark Minerals Intelligence industry indicator showed that the price of lithium has increased by more than 250% in the last year.
The Daily Caller reports that although the cost of producing a lithium-ion battery for an electric vehicle (EV) has decreased dramatically over the past decade, the decline has stalled in recent months due to increased lithium prices.
According to the Department of Energy, the average cost of an electric vehicle battery pack dropped to $157 per kilowatt-hour, a measure of energy capacity, in 2021.
Research from Bloomberg showed that an average EV battery costs between $6,000 and $7,000. Bloomberg research also suggested that EV pricing would have to drop to about $100 per kilowatt-hour to compete with regular internal combustion engine automobiles. The numbers show lithium prices will significantly impact lowering those costs. Additionally, Converting and refining lithium into the components of an electric vehicle battery could also be keeping prices from dropping further.
Canada-based Lithium Americas has proposed mining lithium in Nevada on a dormant volcano.
However, the company has yet to extract any lithium because of opposition from environmentalists and ongoing lawsuits over accusations that the federal government authorized the business’s mining permit too fast. If the mine goes into production, it will help lessen the United States’ reliance on foreign lithium while also increasing supply when demand for the mineral is on the rise. The company’s CEO, Jon Evans, said, “It’s like being in a hot real estate market. There’s a mad scramble.”
According to the United States Geological Survey (USGS), the United States holds around 750,000 metric tons of lithium that can be mined, but it produces a relatively small amount and imports tens of thousands of metric tons from Argentina, Chile, China, and Russia. However, the USGS study excluded particular U.S. statistics to avoid releasing proprietary information belonging to corporations like Lithium Americas.
China currently accounts for approximately 80% of worldwide battery chemical refining capacity. As China dominates the market, Western leaders continue to take steps to persuade people to choose electric vehicles as their next car, with President Biden introducing a proposal to make electric cars 50% of automobile purchases by 2030.