Study: EV Battery Prices Not Likely To Be Significantly Impacted By Lithium Market Fluctuations

Originally published on CleanTechnica.

Ongoing fluctuations in the global lithium market are unlikely to significantly impact electric vehicle battery prices — owing to a relatively limited effect on total cell costs — according to a new study from Carnegie Mellon University College of Engineering.

So, despite the doubling of lithium market prices over the last half-year or so, electric vehicle (EV) battery manufacturers shouldn’t have any existential worries owing to lithium prices — though, reduced profit margins are likely.

Lithium prices

It should probably be noted here that known lithium reserves are actually quite substantial, the main limiting factor for availability currently is simply the relatively slow speed that new production capacity can be brought online.

A recent press release provides more:

…analyzed multiple lithium-ion battery chemistries and cell formats to see whether extreme lithium price variations would have a substantial impact. They examined the impact on cell costs if lithium prices increased to $25/kg, more than four times the historical average, and found that lithium is a relatively small contributor to both the battery mass and manufacturing cost.

“Although the battery cost increases were the largest for high power-density cells, which require a lot of material inputs, cell costs never increased more than 10% even using the most extreme assumptions,” stated Rebecca Ciez, an engineering and public policy PhD student.

As far as lithium availability itself (rather than pricing), a professor of materials science engineering and of engineering and public policy named Jay Whitacre commented: “Lithium is plentiful, and our current sources are not the only sources of lithium — they are merely the cheapest. If prices do quadruple, it becomes, in principle, economical to extract lithium from sea water.” And we have quite a bit of sea water in the world.

“There are many other reasons to pursue different battery chemistries, but access to lithium resources is not one of them.”

The new research was published in the Journal of Power Sources.

2 thoughts on “Study: EV Battery Prices Not Likely To Be Significantly Impacted By Lithium Market Fluctuations

  1. I’ve had nightmares thinking about the snake oil industry buying up all the lithium mines. And there is a reason why Elon (Mr.) put the gigafactory in Nevada.

    1. Instead of having nightmares, why not just think it through, and you will quickly realize that this is not going to happen,and you can sleep easy.
      The move to renewable electric power and batteries etc. involves a significant climb-down from the geo-strategic curses that have affected fossil-fuels as resources.
      A 50kwh battery (200+ miles for small family vehicle) needs around 12.5kg of lithium metal – and current cost is around $6/kg. Note that lithium is not ‘consumed’ in the way that fossil fuels are. Once a battery has come to the end of its useful life (at least 20 years given secondary use as stationary storage) its lithium can potentially be recycled in perpetuity.
      As the article notes, you can also extract lithium from average sea water at current technology cost of $20-30/kg (this price can come down obviously, since it is technology limited, not supply limited). So – worst case scenario – in 20 years time the concentrated ‘easy’ deposits are depleting. At that stage any country with a coastline (over 75% of countries) can extract lithium from sea water at a max. cost of $15-20/kg (likely less). Most of the 25% of landlocked countries (with less than 7% of the world’s population) have amicable arrangements and and trade with non-landlocked ones, and at worst, the UN Convention on the Law of the Sea provides right of access to coastline trade without taxation through transit states.
      The power & politics angle: The only way to capture undue influence over the market would be through heavy investment in R&D, IP and patents (with max. 20 year duration). Scientific publishing is quickly moving to an open-source model, and IT is growing for everyone, so the transmission of technological knowledge will likely get more democratic, not more concentrated, and maintaining walled gardens of technology has probably already peaked. Given that energy needs (and climate change) are a key social priority worldwide, energy related technology/intellectual property is unlikely to become a domain where distorting monopolies are tolerated for long periods.
      If you live in the US where state capture by narrow interest groups is a very significant problem, you may disagree with this analysis. But in my opinion that’s mainly a unique cultural/symbolic problem in the US with entrenched beliefs about the unassailable virtue of capitalism and an unhealthy worship of $$ over broader societal goals (any variety of socialism is still a forbidden word in the US, as opposed to e.g. Europe and Asia). This can and will change, since even regular US folks are becoming increasing aware of the associated problems with this kind of $ fundamentalism.
      In short – lithium and other battery/renewable energy materials/components/technologies are very unlikely to be subject to the same concentration/monopoly abuse as fossil fuels were.
      Sleep well!

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