German Automakers Look to South America for Keystone Lithium Supply

Matt Posky
by Matt Posky

With Europe increasingly fixated on regulating vehicular emissions, German automakers are throwing themselves into electrification like ’90s moms did with Beanie Babies. As with those moms, the investment has yet to pay off. Still, that hasn’t encouraged anyone to change course. Every player understood from the outset that transitioning to EVs was bound to be costly and, with increasingly stringent regulations proposed every month, there aren’t many alternatives.

Volkswagen placed its very existence on electrification after Dieselgate, quickly running into problems with battery suppliers. And while VW claims it’s solved the issue for the next few years, it isn’t out of the woods yet. VW and Daimler have reportedly commissioned a study into sustainable lithium mining in Chile, but it’s already receiving pushback from environmental groups concerned about the delicate nature of the region’s Atacama salt flat — where the metal is found in abundance.

Unlike other locations, where lithium is mined from rock, Atacama miners extract the element from brine pools. Chilean locals and activist groups are concerned that the ultra-dry desert’s water table could be damaged, with the risk increasing as EVs become commonplace. More mining is guaranteed to disrupt the area’s rather fragile and unique ecosystem, which is heavily dependent upon underground springs to support life.

Reuters reports that Volkswagen visited Atacama in January, foreshadowing new efforts to secure the foundation of its battery supply chain. Daimler may have popped in to check out the scene as well, but declined to comment on the matter.

From Reuters:

Lobbying records show a team from German development agency GIZ and the public-private Fundacion Chile met with Cristóbal De La Maza, chief of top Chilean environmental regulator SMA, early this year to formally present plans for the “feasibility study.”

“This project is driven by the Volkswagen and Daimler companies,” the filings read. “The growing importance of batteries has made the sustainability of lithium a key priority for these companies.”

While electrification has its merits, there are still legitimate questions that must be answered about battery waste and mining practices. A lot of the materials necessary for battery production come from a handful of areas, obtained by low-wage employees ( sometimes children, in the case of cobalt) in regions enacting few environmental or occupational safeguards. But what are automakers to do when governments mandate zero emissions, with EVs looking like the only answer?

While the irony of environmentalists standing in the way of electric vehicle production isn’t lost on us, this just seems sad. Unless electric vehicles die on the vine, there’ll soon be a colossal surge in battery related mining. There has to be. The increased production of mobile devices has already mashed down the accelerator. EVs will deliver a giant shot of nitrous, bringing new risks to the table in the quest for automotive superiority. How is any of this going to work if one green solution just sweeps new environmental hazards under someone else’s rug?

[Image: Ksenia Ragozina/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Schmitt trigger Schmitt trigger on Feb 12, 2020

    "Electric cars are great with their immediate torque, but they lack the appeal of the sound of a V-8 engine in a class automobile." Or with a capable digital signal processor whose signal is amplified by a powerful class-D amplifier, driving some rare-earth loudspeakers, the sound AND vibration of such an engine, any engine, could be re-created. Big block American V8? Option 1. Ferrari 12? Option 2. Classic BMW inline 6? Got it, option 3. Of course, I am only joking.......But someone may even start a Kickstarter program to develop such a product.

  • TimK TimK on Feb 12, 2020

    Spent some time on the Chilean altiplano in 2013. Even back then, there were lots of Chinese roaming about. There is a channel on local TV with a Chinese news anchor speaking Spanish. Weird stuff in a gorgeous land, awesome landscapes everywhere you look. I think the Krauts may be a day late and a Euro short in sewing up deals for Lithium.

  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.