Analysts warn that a lithium supply chain crunch could come as soon as 2023 — and put a potential damper on U.S. vehicle electrification goals. Five- to tenfold growth is expected in the global lithium battery market over the next decade as people shift to electric vehicles (EVs), but already lithium supplies are tight.
“Big companies probably feel like there’s a lot of lithium in the world right now, and I’m going to get access to it,” Venkat Srinivasan, director of the Argonne Collaborative Center for Energy Storage Science and deputy director of the Joint Center for Energy Storage Research, told GreenBiz. “But for everybody else, if you don’t have that long-term contract, what do you do?” Companies that use lithium outside of the EV market are especially feeling the pain, he told GreenBiz. Some can’t get anyone to answer their calls.
President Joe Biden invoked the Defense Production Act in March to encourage domestic production of minerals for lithium batteries. But with China, Australia and Chile producing most of the world’s lithium, and China manufacturing roughly 70 percent of the world’s EV batteries, the U.S. has a lot of catching up to do.
Nevertheless, Srinivasan is optimistic that the U.S. will solve its supply chain crunch. A lot of people are “throwing ideas at the wall,” he said, and that means something has to stick. Plus, he’s excited that many companies finally have market funding in the $100 million range. “People like me who are feeding the R&D pipeline have companies that are now looking at these solutions very carefully because they have the funding to scale,” he said.
Here’s what looks promising in the near-to-medium term:
A closed loop lithium-ion battery economy
A handful of companies have cracked the challenges of lithium battery recycling and are commercializing a promising new technology for recovering lithium, cobalt and nickel from spent batteries. Investors are pouring in hundreds of millions to the industry, while the Biden administration earmarked $3.16 billion toward it.