The U.S. is About to Face a Battery Shortage in Race to Ramp up EV Production
China is the clear leader in the electric-vehicle world. Not only does the country dominate others when it comes to sales, but it's also the leader in the production of electric cars, too. There's a few reasons that point toward why China is such a dominant force – one being emissions regulations and the other being the number of investments that the country has made when it comes to lithium mining projects. Unfortunately, while the U.S. is looking to take on China in electric vehicle sales and production, America has a battery issue.
It's All About The Lithium
In a lengthy report, Bloomberg outlined why the U.S. is failing to catch up to China in the electric-vehicle realm, and it all boils down to China producing roughly eight times more lithium domestically than the U.S.
"It has been decades since a lithium refining facility has been built in the United States," said Eric Norris, the president of Albemarle Corp. that's based out of North Carolina. "Any new project will take time to develop, as the regulatory bodies determine required permits, potential community impact, etc."
According to Bloomberg's research, the U.S. is attributed to producing only 1.2% of the world's lithium, while America is in control of roughly 13% of the global lithium cell production capacity. Compare that to China, which currently controls approximately two-thirds of the industry – that figure is projected to increase to 73% by 2021 – and the issue becomes apparent.
Having a firm grasp on the lithium industry has led to sales being up in China. Nearly half of all of the electric cars in the world are sold in China. And that figure is projected to increase. "You can't build half a million electric vehicle battery packs without a secure supply of several critical raw materials," said Chris Berry, a battery-metals analyst at House Mountain Partners. "If the U.S. lags in the build out of lithium or cathode capacity, its supply chain dynamism and competitiveness around the new energy theme is put at risk."
Why Having A Plan Is Important
To address the issue, a meeting on the raw materials gap is taking place this month in Washington, D.C. and is being hosted by Benchmark Mineral Intelligence. The goal of the meeting is to shed more light on why the U.S. imports half the amount of graphite, manganese, nick, cobalt, and lithium required to make rechargeable batteries and how to beef up production in the country.
"There's no reason why companies can't raise capital and build and operate lithium mines in the U.S.," said Berry. "The permitting process can be somewhat longer in the US relative to other parts of the world, but with so much focus on sustainability and transparency of the supply chain, environmental safeguards are a must."
Bloomberg believes that demand for lithium will grow to a million tons a year by 2025, up from 300,000 tons a year, so having a plan in place for how and where the U.S. will gather the necessary materials to make batteries is key.
- Volkswagen Announces EV Plants in China to Compete With Tesla
- EVs Expected to Account For Half of New-Car Sales by 2040
- Germany Opens First Electric Highway to Charge Hybrid Semi-Trucks
- Illinois Becomes Latest State to Charge EV Owners With Annual Fee
- May Mobility to Begin Testing Autonomous Shuttles in Rhode Island
- General Motors Holding Talks to Sell Lordstown Factory to Startup Workhorse
- Honda and Toyota Scrambling to Find Funds to Develop EVs, New Tech
- Tesla Claims Affordable Autonomous Cars Aren’t Possible Without China