As reported by Reuters and other news agencies around the world, there is a global shortage of lithium-ion batteries, as demand for electric vehicles has surged in recent times. There is a shortage of lithium – the metal that is the core ingredient of li-ion batteries – and countries are seeking to increase their supplies and compete with China’s mining capabilities.
Given the shortage in lithium, reports suggest that it could cause a 22% spike in the cost of electric vehicles by 2026, which is something that we could certainly do without as we look to expedite the transition from petrol and diesel cars to electric vehicles in the very near future. From 2022 – 2026, the cost of producing electric vehicles is likely to surge, and it’s primarily due to the scarcity of the raw materials required to produce EV battery cells.
News outlets speculate that the battery industry is not equipped to meet the “tsunami of demand” that is about to come, as governments all around the world look set to meet their ambitious climate change targets by switching their citizens to EVs. It’s a difficult situation to be in, as battery producers want to meet the demand, but there is simply a shortage of the raw materials to be able to do so. If we don’t increase our lithium mining capabilities, there’s no way to meet the demand that is only going to increase in the coming years.
Sources predict that the global shortage could drive up the cost of lithium-ion batteries for electric vehicles to anywhere between $1,500 and $3,000 per car. This is a significant increase and comes at a time when the US automobile industry has announced exciting plans to embrace electric vehicles. It prompted Jim Farley, the CEO of Ford, to request more domestic lithium mining, as the company anticipates the launch of its F-150 Lightning vehicle.
The sentiment has been echoed by Elon Musk, CEO of Tesla, who believes that sustainable lithium mining is required in order to meet the unstoppable demand for electric vehicles in the coming years. In the last two years alone, the cost of lithium has increased by almost 900%, and most of it comes from China. This presents European and American markets with a problem and one that they need to act quickly on to ensure they don’t get left behind.
At AceOn, we’re part of several exciting projects reliant on Lithium-ion batteries, and we will keep a close eye on the fluctuations in the price of lithium in the coming years. Let’s hope that we make the necessary strides forward required in order to bring the cost of lithium down, so more of us can make the transition from petrol and diesel vehicles to electric cars in keeping with our climate change goals.
