3 ms·

The price of the raw materials for batteries is going up dramatically and the supply is not increasing accordingly. That's with today's demands- not a future wh

The price of the raw materials for batteries is going up dramatically and the supply is not increasing accordingly. That's with today's demands- not a future where we need 10x the battery capacity. There's been a lot of attention paid to nickel recently, but nickel may have enough availability with Tesla getting New Caledonia mining back online and Indonesia being ready to mine their nickel deposits. Still, the price of nickel is up ~2x right now. Cobalt is also up ~2x and has major ethical issues. But let's assume the industry can move at least grid storage applications to the LFP chemistry and reduce the pressure on these minerals. The price of lithium is up ~5x. It's easy for this author or Elon Musk to say that there is plenty of lithium in the ground, but it's a lot harder to actually produce it. Tesla is experimenting with new lithium extraction techniques in Nevada- this will take a lot of time to come to fruition. The easiest scenario is existing mines increasing their production, but even in these cases it can be a long process to satisfy environmental concerns. Historically commodity super cycles last 10+ years with metals being much longer. I would be interested in someone with more knowledge than me projecting the future here on both the demand and supply side, but instead in the article you linked we get "Lithium is not rare, but demand is growing so fast mining may take a few years to catch up". I don't think the author appreciates how long it takes to bring significant mining capacity online. And certainly the stated assumption that the "cost of these batteries is plummeting" is completely untrue at this point. Those with a deeper understanding are warning of a possible battery shortage [1]. [1] https://www.wsj.com/articles/rivian-ceo-warns-of-looming-electric-vehicle-battery-shortage-11650276000?st=fzokzf32abrcbne&reflink=desktopwebshare_permalink https://www.wsj.com/articles/rivian-ceo-warns-of-looming-ele...

ZeroGravitas 4y ago
There's nothing new there. Musk has been talking about how many "gigafactories" making batteries the world would need for a long time. And even battery manufacturers were a bit taken aback by the scale proposed. > Three years ago, when the Gigafactory was first proposed, "I thought it was crazy," said Yamada. "At that time, production capacity of this Gigafactory would exceed total production of the industry. Not Panasonic. Not Japanese companies. All Japanese, Korean, and Chinese companies combined. I thought it was a crazy idea. "But I was crazy. And I was wrong. After seeing extraordinary success of the announcing of Model 3, there is a strong demand for this battery. So, three years ago I thought this was a crazy idea. But I was crazy at the time
- gregwebs 4y ago
  It's not the battery cell production that is the real issue. Battery cell production is a big issue, but production can be increased in a few years to keep pace with demand if the raw materials are available. The new aspect is the price signal that Lithium is now sending. This means that lithium will limit the ability to increase battery production and that battery prices are not going to decline as they have in the past. The history of commodities means this situation is more likely to hold for a decade than a year.

ZeroGravitas 4y ago

There's nothing new there. Musk has been talking about how many "gigafactories" making batteries the world would need for a long time. And even battery manufacturers were a bit taken aback by the scale proposed. > Three years ago, when the Gigafactory was first proposed, "I thought it was crazy," said Yamada. "At that time, production capacity of this Gigafactory would exceed total production of the industry. Not Panasonic. Not Japanese companies. All Japanese, Korean, and Chinese companies combined. I thought it was a crazy idea. "But I was crazy. And I was wrong. After seeing extraordinary success of the announcing of Model 3, there is a strong demand for this battery. So, three years ago I thought this was a crazy idea. But I was crazy at the time

gregwebs 4y ago
It's not the battery cell production that is the real issue. Battery cell production is a big issue, but production can be increased in a few years to keep pace with demand if the raw materials are available. The new aspect is the price signal that Lithium is now sending. This means that lithium will limit the ability to increase battery production and that battery prices are not going to decline as they have in the past. The history of commodities means this situation is more likely to hold for a decade than a year.