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Car companies are taking unprecedented steps to procure lithium for EV batteries.

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Car companies procure lithium for EV batteries, which is a periodic element displayed on a computer screen.

Car companies are taking unprecedented steps to procure lithium for EV batteries.

The U.S. auto industry anticipates an increased production of electric vehicles (EVs). They expect sales to reach 14 million by the end of 2023, an increase of 35% over 2022, and that’s just for starters. The upswing in demand triggers the need for lithium to build the batteries that power the EVs. Car companies are now entering the lithium mining business to prevent snags in obtaining the supply.

At the end of life, an EV battery is plugged into a charging station.

A global enterprise

The challenging demand for electric vehicles has caused an increase in the mining of lithium all over the world. There are dozens of proposed projects, but most will take years to develop. In time, the demand will exceed the supply, and carmakers know that the price of lithium will rise accordingly. Consequently, they are moving to control lithium mines to guarantee their supply.

A global enterprise

Car companies to procure lithium for EV batteries.

The challenging demand for electric vehicles has caused an increase in the mining of lithium all over the world. There are dozens of proposed projects, but most will take years to develop. In time, the demand will exceed the supply, and carmakers know that the price of lithium will rise accordingly. Consequently, they are moving to control lithium mines to guarantee their supply.

Ford and GM compete with Tesla.

Since 2014, Tesla has poured more than $6.2 billion into its Nevada lithium-ion battery factory. In 2022, the company contracted with various mining firms or refiners to supply more than 95% of its lithium requirements. Other car companies have followed suit. The Ford Motor Company has lithium agreements with mining firms in Chile, Quebec, and Charlotte, NC. The automaker also has a preliminary agreement with a lithium mine developing in Argentina. General Motors has a deal with a Philadelphia company to obtain lithium from their mines in South Africa. GM has also signed a $650 million contract with a mining company based in Vancouver. This agreement will provide the automaker exclusive rights to the lithium extracted from Nevada’s Thacker Pass Mine.

Leadership in car companies that compete with Tesla in the electric vehicle (EV) market are concerned that if they don’t act swiftly to secure their lithium sources, Tesla will outshine them.

 

Negotiations abound

For the most part, automakers are not buying stakes in lithium mines. Instead, they are negotiating agreements to purchase a certain amount of lithium at a specific price. They aim to secure exclusive access to my output and ensure they have an advantage over their rivals by obtaining lithium supplies before anyone else.

 

Environmental concerns

Much water is used in the lithium extraction—about 500,000 gallons per metric ton. Miners drill for the metal beneath salt flats in South America. Located in Argentina, Bolivia, and Chile, the Lithium Triangle is an incredibly significant region as it holds a staggering majority of the world’s supply of highly coveted metal lithium. However, because the salt flats here are so dry, more than 65% of the Triangle’s water is used in mining. This causes communities to have to secure their water from other areas. There is also the potential for toxic chemical leaks. Lithium extraction is harmful to the soil and contaminates the air. In 2016, the Chinese found dead fish in a river where a toxic chemical had leaked from a lithium mine. A sharp increase in mining activity had resulted in contaminated water for the second time in three years. In Argentina, mining operations resulted in contaminated streams used by humans and animals as well as for the irrigation of crops.

E-recycling for lithium-ion batteries

Car companies procure lithium for EV batteries.

To ensure the responsible disposal of batteries used in small devices and prevent electronic waste from ending up in landfills, it is recommended to take them to reputable e-recycling companies like Urban E-Recycling. But the large EV batteries are a different matter. Specialized e-recycling companies receive EV batteries from automobile dealerships to break down the components and purify materials like lithium for reuse. In the meantime, robotic technology is being developed to find new ways to remove lithium-ion cells from EV batteries. While the demand for EVs is currently high, continued interest in a public accustomed to gas-propelled vehicles remains to be seen. If the car manufacturers are on the right track, EVs will be the future of personal transportation. However, the environmental concerns related to lithium mining will still need to be resolved.

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