How lithium market affects Tesla and other EV makers !
Market affect of lithium
Tesla and other EV makers today rely on several different minerals for their power lithium batteries, one of which is lithium, which is mostly mined, refined and processed in China, even though lithium deposits are scattered around the world.
Nonetheless, China already has some competitive advantages of scale in the electric vehicle mineral raw material market landscape, which will certainly play a role in the development plans of Tesla and other electric vehicle manufacturers.
China is actively working to maintain its core position in the processing of lithium and other minerals for electric vehicle lithium batteries. The trend comes at a time when demand for electric vehicles surges as consumers switch to zero-carbon technologies – causing lithium prices to rise 400% from last year.
The International Energy Agency estimates that lithium sales will grow 20-fold in the decade to 2030, and China already leads the world lithium market. Additionally, Tesla gets most of its lithium from the country, some from companies with mining operations in Argentina. Still, China is estimated to extract more than half of the world’s lithium.
Tesla’s deals with refiners
Still, Tesla has struck supply deals with lithium refiners in China.
Additionally, CEO Elon Musk noted that rising lithium mining and refining costs could require Tesla to “go directly into mining and refining at scale unless costs are reduced”
But because of China’s high focus on raw materials in its own supply chain, Tesla’s relationship with Chinese lithium refiners won’t go any further, but even North American lithium miners, such as U.S. companies Albemarle and Livent, that start refining on their own, Even with policy support from the Biden administration, the U.S. is still years away from catching up with China’s lithium market.
“China is the factory of the world,” said Henri Tausch, CEO of 5E Advanced Materials. “China is just trying to integrate (materials) into their manufacturing process.”
