Value chain: downstream
Automotive
350 million EVs are expected to be sold globally by 2030. Lithium production needs to increase four-fold by 2030.
Alternative solutions like Direct Lithium Extraction (DLE) or sodium-ion (Na-ion) batteries emerge as promising pathways.
The EV industry needs to mitigate supply vulnerabilities and strengthen recycling and reuse of critical battery materials.
EVS ARE KEY TO THE DECARBONISATION OF THE AUTOMOTIVE INDUSTRY, BUT THERE IS A CRITICAL ELEMENT THAT COULD HALT EV PRODUCTION – LITHIUM. TO PUT IT IN CONTEXT, THERE IS AN ANNUAL GLOBAL SUPPLY OF 0.75 MILLION TONNES (MT) OF LITHIUM CARBONATE EQUIVALENT (LCE) AND A DEMAND OF 0.72 MT LCE. FORECASTS PREDICT DEMAND OF 3.06 MT LCE BY 2030 BASED ON CURRENT BATTERY TECHNOLOGIES AND MINERAL EXTRACTION MECHANISMS.
MAJOR CAR MANUFACTURERS ARE AWARE OF THE CHALLENGE OF PROCURING LITHIUM. VOLKSWAGEN GROUP RECENTLY OPENED ITS FIRST PILOT FACILITY TO RECYCLE VEHICLE BATTERIES AND RECOVER RAW MATERIALS SUCH AS LITHIUM, NICKEL, MANGANESE AND COBALT. SIMILARLY, STELLANTIS PARTNERED WITH ORANO TO ACHIEVE A RECYCLING RATE OF 69.3% FOR LITHIUM-ION (LI-ION) BATTERIES. FURTHERMORE, TOYOTA AND MERCEDES-BENZ GROUP ARE DEVELOPING NEXT-GEN LI-ION BATTERIES TO ACHIEVE A LONGER SERVICE LIFE, GREATER ENERGY DENSITY AND A MORE COMPACT SIZE.
The current method to extract lithium is inefficient, slow and harms the environment. More than two million litres of water is required to produce one ton of lithium. In contrast, DLE requires 99.9% less water. DLE has a 90-95% lithium recovery rate compared to a traditional rate of 20-40%. Additionally, the processing time for DLE is about two days, compared to the conventional 18 months. Companies like EnergyX, SQM, E3 Lithium and Vulcan Energy Resources are pioneers in this field.
As demand for Li-ion batteries skyrockets, some stakeholders are proposing sodium-ion (Na-ion) batteries as an alternative. This type of battery is about 30% cheaper and avoids the need for critical materials, including the average 8.9 kg of lithium required per EV produced. The main disadvantage of a Na-ion battery is the lower energy density it offers – 75 to 160 Wh/kg compared to 120 – 260 Wh/kg. Lower density would tend to favour deployment for urban EVs with shorter range requirements.
THE EV INDUSTRY REQUIRES JOINT EFFORTS IN EFFICIENT LITHIUM EXTRACTION METHODS AND ALTERNATIVE BATTERY TECHNOLOGIES. AUSTRALIA, CHILE AND CHINA CURRENTLY DOMINATE LITHIUM PRODUCTION, WITH 52%, 25% AND 13% OF THE MARKET, RESPECTIVELY. IT IS CRUCIAL FOR STAKEHOLDERS TO MITIGATE RISK AND DIVERSIFY THEIR LITHIUM SOURCES, SINCE OVERRELIANCE ON A FEW PRODUCERS INCREASES SUPPLY CHAIN RISKS. ONGOING INITIATIVES AND EFFORTS IN TO RECYCLE LITHIUM-BASED BATTERIES ARE EQUALLY IMPORTANT.
