China Claims Cheap Lithium Production…But Will It Make Cheaper (and More) Electric Cars?

One of the hindrances to mass production of electric cars is the inability of battery production to keep up. One of the hindrances to battery production is the lack of minerals that go into making the batteries. So, the logic goes that who controls the mineral supply will also control electric car production,

China presently produces almost two-thirds of the entire world’s Li-on batteries and, especially with the on-going trade war, the US doesn’t like it. The US has moved to introduce draft legislation, ie. the American Mineral Security Act, to tighten control over the mining of minerals, including those used in batteries, which in effect would curb China’s dominance on battery supply.

But China, like a bawse, announced that it has made a breakthrough in the production of one of the most important material in battery production: lithium. In 2018, the mines in China contributed just 9% of global lithium production. There is some disagreement, to put it mildly, in the amount of lithium reserves that China has. The Chinese government claims that more than 60% of the world’s reserves are in the Tibetan Plateau, which it will tap into with the help of the new technology. The US Geological Survey, however, found that only 7% of the world’s reserves were in China.

China’s reserves have yet to be mined because of the harsh conditions of the isolated salt lakes. The new technology does not help access the mineral per se but makes the process of separating lithium from the other minerals cheaper by—if the Chinese government is to be believed—a lot. According to the government report, the new technology extracts the mineral at a low cost of US$2,180 per tonne. While official numbers are unavailable, the South China Morning Press spoke to industry insiders who agreed that this would be among or even the lowest rate around. If that is correct, it might justify the trouble of accessing and mining China’s lithium reserves.

Does this mean that China could eventually dominate electric car production? Will we get affordable EVs plying the roads in hordes? The reality is that lithium is just one of several minerals used to make car batteries and not the only one facing a potential shortage. Nickel and copper are common minerals but also widely used in all sorts of daily applications. Companies from Volkswagen to Apple are scrambling to secure their future supply of cobalt.

So, having cheaper and a new source of lithium might lower prices of batteries and the cars they inhabit, but when it and other minerals run out, it might be the internal combustion engine that is left chugging along.