Dec. 1 (Reuters) – Automakers must work more closely with lithium producers to ensure a supply of specialized types of white metal that improve the range and performance of an electric vehicle, Albemarle executives said Corp (ALB.N) and Livent Corp (LTHM.N) at Reuters Next conference Wednesday.
As electric vehicles become more widespread, automakers are planning models that can run longer before recharging and handle different weather conditions. The batteries in these electric vehicles are typically made with a type of lithium called hydroxide which cannot be stored for long periods of time and therefore must be manufactured in custom batches.
As such, its production requires significant investment and planning, which lithium producers are reluctant to do even if prices rise unless automakers sign long-term contracts and share development plans, have said Eric Norris, head of Albemarle’s lithium division, and Paul Graves, managing director of Livent. Next panel.
“It’s very important that we have the kind of relationship and transparency with (the automakers) so that we don’t put them in a situation where they don’t have the product available that they need,” said Norris, who joined Albemarle in 2018.
“We need some economic data to be able to continue to grow.”
Without such coordination, the auto industry might not have the type of lithium needed to extend the life of electric vehicles, making them less attractive to consumers.
Global demand for lithium last year was around 320,000 tonnes. Most industry consultants predict it will reach 1 million tonnes by 2025 and 3 million tonnes by the end of the decade.
“There may be times when there just isn’t enough lithium available to meet exactly what every (automaker) is trying to do,” said Graves, who has led Livent since its split from FMC Corp ( FMC.N) in 2018.
“The demand side of the equation needs to be very thoughtful about its business plans over the next three or four years.”
General MotorsCo (GM.N), Stellantis NV (STLA.MI) and others this year signed supply agreements with so-called direct lithium-mining (DLE) start-ups promising to sustainably produce carbon. lithium from geothermal brines in California and Germany. Bill Gates’ Breakthrough Energy Ventures also invested in a DLE company.
DLE technologies differ, but each promises a unique approach to extracting metal from any geological deposit around the world, a tempting prospect for an auto industry hungry for more supply.
But DLE technologies are also generally more expensive and use more energy than evaporation ponds, which use solar energy to produce lithium. Both executives said DLE performs best when designed for a specific lithium deposit, a factor that should likely dampen enthusiasm for it.
“You have to look at the facts when you look at what is touted as being more sustainable,” Norris said of DLE. “He usually focuses on one element of that durability and not the whole picture.”
Livent itself uses a type of DLE technology in Argentina alongside evaporation ponds, a bespoke approach that works in this operation but might not work elsewhere, Graves said.
“There is hope that there has been a technological breakthrough that will suddenly release all of this abundant lithium at an incredibly low cost into the world,” he said. “But the rules of chemistry and physics don’t bend very easily.”
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