At RealClearPolicy Lars Carlstrom has an upbeat post about the burgeoning domestic lithium industry:
t’s no secret that the Inflation Reduction Act has been a game-changer for the U.S. energy transition value chain. Indeed, the legislation was a key driver for launching Statevolt when we did, and subsequently our partnership with Controlled Thermal Resources on our Hell’s Kitchen Lithium and Power plant. Despite its name, the Hell’s Kitchen Lithium and Power facility has no affiliation with Gordon Ramsey’s hit US reality TV show. Instead of terrorising aspiring chefs, the 54GWh Gigafactory will produce lithium and geothermal power right here in California.
As the demand for EVs and renewable energy grows, so too does the demand for lithium, which is needed to produce the batteries that store the energy generated by renewable sources. The need for domestic lithium supply chains is at an all-time high, with U.S. lithium demand for EVs and storage forecast to reach 383 kilotons by 2030 (Source: IEA).
Read the whole thing. Recently, I’ve read a number of articles about the headwinds the Chips and Science Act is encountering. As it turns out building an entire supply chain is harder than adding chip fabricating plants and that’s hard enough. We have a long way to go recover the ground we’ve lost over the last 30 years. Let’s hope we see a lot more posts like Mr. Carlstrom’s.
It’s going to be darned hard not to mention expensive to promote the adoption of electric vehicles when their prices rise as fast as they have recently and, since a considerable portion of their cost is in the batteries, producing more lithium is a necessary step.
More lithium is on the way. Oddly enough when the price goes up people are willing to mine more of it. Also, there are regular incremental improvements to the production, costs and capacity of the batteries that dont get lots of coverage. EVs will remain at some disadvantage I guess since the price of gasoline is a constant that never varies.
https://www.nytimes.com/2023/02/10/business/electric-vehicles-price-cost.html
Steve
From WFB
“Ford announced last week it is investing $3.5 billion to build a Michigan factory that will produce EV batteries in partnership with Chinese battery giant Contemporary Amperex Technology Co., Limited. The Chinese firm is not only providing technology but also sending equipment and workers to help build and run the factory, according to Ford.
Biden promised that his massive climate spending package, the so-called Inflation Reduction Act, would give the United States the ability “to compete with China for the future.” The law, which Democrats pushed through Congress along party lines, has provisions that bar companies from qualifying for tax credits if any EV battery components were manufactured by a “foreign entity of concern,” a provision aimed at quelling concerns that China will benefit.
But Ford expressed confidence Monday that its EV battery plant, 100 miles west of Detroit, will qualify for some of the Inflation Reduction Act’s lucrative federal tax breaks. The company emphasized that it owns 100 percent of the factory because the deal with the Chinese firm is structured as a licensing agreement rather than as a joint venture, meaning Ford’s Chinese partner does not have direct ownership.
That means Biden’s Inflation Reduction Act could end up sending taxpayer money to America’s biggest global adversary. The U.S. auto giant’s reliance on the foreign firm reflects China’s iron grip on the green energy supply chain—which has plagued the White House’s efforts at “catalyzing America’s clean energy economy” with federal subsidies.
Ford said the Chinese partnership is necessary to “build more EVs faster” and that battery technology and materials are “always imported.”
Ford’s announcement of the Michigan factory came after Virginia governor Glenn Youngkin (R.) in January withdrew his state from negotiations to host the plant. The Republican said he would not use taxpayer funds to “recruit Ford as a front for China.” “
How quickly we forget all of the crowing when Walker/Trump were going to extend tax breaks so that Chinese companies would come here. How quickly Drew forgets that Youngkin was CEO of the Carlyle group, making millions off deals with China. There is actually zero evidence that any taxpayer money would go to China sine it will be a licensed product with Ford having total ownership and when confronted with that Youngkin resorted to saying we should not have technology here from CCP influenced CATL.
This is pretty clearly a political act to enhance Youngkin’s shot at running for POTUS, paid for by the Virginia residents in a poor area that would not get the manufacturing jobs the GOP pretends to care about.
Steve
There may not be enough lithium in the ground to get to Net Zero:
“Michaux estimates that we need 944 million tons of lithium alone to go Net Zero (the first time). But at the moment every year we dig up about 100,000 tons a year…
Current total known reserves of lithium throughout the world in 2022 are just 26 million tons. Total known (best guess) resources are 98 million tons).”
https://joannenova.com.au/2023/02/net-zero-by-2050-we-need-about-10000-years-of-current-lithium-production-to-get-there-first/
One can only hope this is true, and that a return to the Middle Ages, without industry or modern agriculture, and a total world population of 500 million or less, won’t be attempted.
PS. George Monbiot, the well-known environmental zealot, thinks we should end farming, and replace it with lab grown foods.
Lunacy like this eventually becomes “common sense” environmentalism, and gets enacted into law.
I have no problem with Chinese companies coming here with a deal like Ford – as long as there is reciprocity and we can make them give us their technology and processes as they’ve been doing to our companies.
The perfect is the enemy of the good. IMO Net Zero is not a worthwhile goal; reducing emissions is. Consequently, I think that EVs are a strategic failure—hybrids have a lot fewer requirements int terms of batteries.