By on November 13, 2019

The lithium industry — essential for the production of battery electric vehicles — has run into a problem. It’s currently amassing more of the metal than it needs. Despite automakers like Tesla suggesting there will be upcoming global shortages of metals like copper, nickel, and lithium, the only element that battery suppliers appear to be truly desperate for is cobalt, which is largely the fault of where and how it’s mined (the Congo, often by children).

Demand for the brittle, bluish metal skyrocketed this year, but not lithium. The latter metal’s global supply currently exceeds demand by about 5 percent, according to data from Canaccord Genuity. 

Reuters attributes the downfall in demand to electric vehicle sales in China. The People’s Republic has been doing most of the heavy lifting when it comes to EVs. Government programs have encouraged both the production and purchase of EVs, making it their most-viable market. But China has backed off the subsidies in recent months, hoping to allow electric startups and customer preferences to stand on their own two legs, or fall. While automakers stayed put, customers have been leaving in droves. EV sales fell by nearly a third in September, making it the segment’s third consecutive monthly decline.

Part of that is due to China’s souring economy, though the way the nation handled EV adoption also played a factor. Confusing emission laws, unevenly adopted between regions, spooked consumers away from the market. It’s also forced dealers to price less than predictably. A surplus of product forced heavy discounting over the summer, causing a momentary blip in sales. However, the country saw vehicle sales drop more than 12 percent in the first six months of 2019 and that looks to be the trend for the rest of this year.

From Reuters:

A global average of [lithium] prices is down more than 50 percent since the start of 2018, according to Benchmark Mineral Intelligence, a metals pricing provider that is hosting an EV supply chain conference this week in Los Angeles.

“Current market conditions are challenging,” Luke Kissam, Albemarle’s chief executive officer, said last week.

Despite the weak data, analysts and executives expect a rosy future when they look out 10 years.

Benchmark’s Simon Moores called the lithium oversupply an “air pocket that detracts from the building wall of demand,” and noted much of the excess white metal on the market is for so-called technical grade, or the kind that goes into smaller consumer electronics such as stopwatches.

Moores believes the high-grade lithium door will swing open in 2024, once more automakers begin manufacturing electric cars. Other analysts are less inclined to believe it’s smooth sailing from here.

“The future supply of battery-quality chemicals is very much in doubt,” worried Joe Lowry, an independent analyst, questioning the industry’s ability to produce over 800,000 metric tons by 2025 — twice its current capacity.

However, that’s a problem for tomorrow. Today’s lithium providers are trying to cut costs and appease investors hungry to make money off the popularization of EVs and rapidly-multiplying consumer electronics. This could create more issues down the road as today’s solution becomes tomorrow’s headache.

[Image: Sergii Chernov/Shutterstock]

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18 Comments on “Suppliers Have More Lithium Than EV Manufacturers Currently Need...”


  • avatar
    randy in rocklin

    There’s a stock ALB which is cobalt mined in NV. It traded a high of 100 a year ago now trading about 60’s. That would be the play for lithium.

  • avatar
    SCE to AUX

    “much of the excess white metal on the market is for so-called technical grade, or the kind that goes into smaller consumer electronics such as stopwatches”

    Then we’re OK for the EVs, right?

    • 0 avatar
      mcs

      ” which is largely the fault of where and how it’s mined (the Congo, often by children).”

      Implies that the Congo is the is the only source of Cobalt which is untrue. Furthermore, Poskey makes no mention of the fact that as part of cost reductions, battery makers have drastically reduced or eliminated cobalt from their batteries.

      https://www.thebalance.com/the-biggest-cobalt-producers-2339726

  • avatar
    NeilM

    Excess lithium? Maybe they could ingest a little to, you know, take the edge off things.

  • avatar
    Lokki

    As of today 13 November 2019 nobody knows whether there is a surplus or shortage of lithium because of the “not exactly a coup” in Bolivia. On Monday 4 November (now ex-) president Morales issued a decree overturning a massive joint lithium project with southern German firm ACISA. The project was/is considered vital for the German auto industry’s plans to develop electric batteries. Bolivia has huge amounts of easily mined lithium.
    On Saturday Morales “resigned” and he left the country on Sunday. He had been president for 14 years and had recently “won” reelection on 20 October.

    So is the agreement with ACISA on or off? It it’s on, there’s a surplus of lithium. If it’s off there’s a shortage.

    • 0 avatar
      phxmotor

      If Bolivian lithium is easily mined… why is a German companies
      involvement necessary one way or another?

      • 0 avatar

        “why is a German companies involvement necessary”?

        Because of the white man’s burden.

      • 0 avatar
        Lokki

        “China has invested $4.2 billion in South America in the past two years, surpassing the value of similar deals by Japanese and South Korean companies in the same period. Chinese entities now control nearly half of global lithium production and 60 percent of electric battery production capacity.

        German officials told Reuters they championed the bid by ACI Systems GmbH because they saw an opportunity to lower Germany’s reliance on Asian battery makers and help its carmakers catch up with Chinese and U.S. rivals in the race to make electric cars.”

        “Juan Carlos Montenegro, the head of YLB, Bolivia’s state-owned lithium producer, said geopolitics was a factor for Bolivia in deciding which companies to work with.

        “We don’t want a single country to set the rules, we want balance and other world powers must help create that balance,” he said. “So for Bolivia it’s important to have not just economic partners for markets, but geopolitical strategic partners.”

  • avatar
    NeilM

    Bolivia needs money and has lithium; the world has money and needs lithium.
    These factors have a way of outlasting current events and finding their own equilibrium.

  • avatar
    indi500fan

    Question for the B & B:

    So what does this mean for battery recycling?
    How does the price of mined lithium compare with recycled lithium?
    Are all these cells going into the landfill or the recycle plant?

    • 0 avatar
      chris724

      Do lithium batteries ever actually die? They seem pretty good to me.

      • 0 avatar
        dal20402

        Yes, they do die eventually, and one hopes they will all be recycled. It’s physically not a problem to recycle them, but it’s not clear yet how the economics of it will work out.

        Lithium batteries particularly hate spending a long time fully charged or fully discharged. They prefer to be used regularly, and ideally to stay in a band between about 40% and 80% charge.

        I set my Bolt to charge only to 90% of capacity, unless I know there’s going to be a long driving day, to extend battery lifespan.

        • 0 avatar
          MBella

          You can fully charge your car since the indicated capacity isn’t the actual capacity because battery management already works the way you describe. You’re just limiting yourself unnecessarily

          • 0 avatar
            Luke42

            Depends on the car.

            Check the owner’s manual for your manufacturer’s recommendation for the max everyday charge.

  • avatar
    pwrwrench

    The lithium situation reminds me of the history of uranium in the USA. Most of the uranium for the Manhattan Project came from, what was then called, the Belgian Congo. The same area where cobalt and copper are found in great quantities today.
    After WWII the USA government policy was that having a domestic source of uranium was important for “national security”. A much higher price was offered for uranium mined in the USA. Some people struck it rich, such as Charles Steen (who managed to lose his millions). Many uranium mines and refining mills were started. After about 20 years the government stopped paying the higher price for uranium and most of the mines closed when the price fell to world market.
    I suspect a similar story will play out with lithium. If the price gets “too” high, battery makers will find an alternative chemistry for their product. Lithium batteries were unknown 40 years ago. The recharagable battery then was the NiCad. Seen any of those lately?

    • 0 avatar
      Luke42

      Those disused uranium mines are also a environmental problem on tribal land.

      Particularly the tailings piles with higher-than-normal uranium content. Wind and rain tends to distribute the uranium dust around, to the detriment of the locals.

      And nobody with the resources to clean it up is willing to pay the bill.

      • 0 avatar
        pwrwrench

        Quite accurate, Luke42. There are numerous uranium tailings dumped in areas that will leach into rivers and streams when it rains or snows melt. Some of the largest ones, such as the one near Moab, Utah, millions have been expended to dig up and truck/train the stuff some miles north. Supposedly out of the Colorado river watershed. However radium and uranium have flowed down the Colorado for more than 60 years. California’s Imperial Valley, which is irrigated by the river, grows about 80% of the lettuce in the USA. It all has traces of radioactive metals.
        Grand Junction Colorado had buildings where the concrete aggregate came from uranium mine tailings. Including a bank and its vault. That was some hot money.
        Unfortunately it is more than a local problem.

  • avatar
    pwrwrench

    BTW Most people throw lithium, and other batteries, in the trash. Regardless of any available recycling programs.
    The trash hauler here regularly sends out an email asking people not to throw their old phones, computers, cordless tools, and battery operated toys in the trash. The message includes some photos of trash trucks on fire. The description is that something with a lithium battery got into the truck and when the load was compressed it was crushed and ignited. Most people do not know or care if a device has a hazardous battery inside. To them it’s now just a “brick” so in the trash, or out the car window, it goes.

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