BEIJING (AP) 鈥� Threatened by possible shortages of lithium for electric car batteries, automakers are racing to lock in supplies of the once-obscure 鈥渨hite gold鈥� in a politically and environmentally fraught competition from China to to .
Co. and the parent company of China鈥檚 BYD Auto Ltd. went straight to the source and bought stakes in lithium miners, a rare step in an industry that relies on outside vendors for copper and other raw materials. Others are investing in lithium refining or ventures to recycle the silvery-white metal from used batteries.
A shortfall in lithium supplies would be an obstacle for government and industry plans to to tens of millions of electric vehicles a year. It is fueling political conflict over resources and complaints about the environmental cost of extracting them.
"We already have that risk鈥� of not being able to get enough, said GM's chief financial officer, Paul A. Jacobson, at a Deutsche Bank conference in mid-June.
鈥淲e鈥檝e got to have partnerships with people that can get us the lithium in the form that we need," Jacobson said.
Ford Motor Co. has signed contracts stretching up to 11 years into the future with lithium suppliers on two continents. Volkswagen AG and Honda Motor Co. are trying to reduce their need for freshly mined ore by forming ventures.
Global lithium output is on track to triple this decade, but sales of electric SUVs, sports cars and sedans that rose 55% last year threaten to outrun that. Each battery requires about eight kilograms (17 pounds) of lithium, plus cobalt, nickel and other metals.
鈥淭here will be a shortage of EV battery supplies,鈥� said Joshua Cobb, senior auto analyst for BMI.
Adding to uncertainty, lithium has emerged as another conflict in strained U.S.-Chinese relations.
Beijing, Washington and other governments see metal supplies for electric vehicles as a strategic issue and are tightening controls on access. ordered three Chinese companies last year to sell lithium mining assets on security grounds.
Other governments including Indonesia, Chile and Zimbabwe are trying to maximize their return on deposits of lithium, cobalt and nickel by requiring miners to invest in refining and processing before they can export.
GM is buying direct access to lithium by investing $650 million in the Canadian developer of a Nevada mine that is the biggest U.S. source. In return, GM says it will get enough for 1 million vehicles a year.
Conservationists and American Indians are asking a federal court to block development of the Nevada mine, which the Biden administration has embraced as part of its clean energy agenda. Opponents say it might poison water supplies and soil and pollute nesting grounds for birds.
鈥淪ecuring metals must not come at a sacrifice to the environment,鈥� said a U.S. group, the Natural Resources Defense Council, in a last year.
BYD Auto鈥檚 parent company, battery maker BYD Co., has announced more than $5 billion in investments in lithium mining and refining over the past 18 months.
Most are in China, but BYD also is promising to spend $290 million on a processing facility in Chile, one of the biggest lithium producers. In exchange, BYD is allowed to buy lithium from Chilean miners at a discount.
At home, BYD announced last year it would invest 28.5 billion yuan ($4.2 billion) in a venture to produce 100,000 tons of lithium carbonate a year in the eastern city of Yichun.
Another Chinese automaker, NIO Inc., bought 12% of Australian lithium miner Greenwing Resources Ltd. last year for 12 million Australian dollars ($8.1 million).
Despite rising output, the industry may face shortages of lithium and cobalt as early as 2025 if enough isn鈥檛 invested in production, according to Leonardo Paoli and Timur Gul of the International Energy Agency.
鈥淪upply side bottlenecks are becoming a real challenge," said Paoli and Gul in a report last year.
Automakers might be putting in their own money to reassure 鈥渘otoriously risk-averse鈥� miners, according to Alastair Bedwell of GlobalData. He said miners are reluctant to 鈥済o all out鈥� on lithium until they are sure the industry won't switch to batteries made with other metals.
Even if they do, developing lithium sources is a yearslong process.
Mines that came online in 2010-19 took on average more than 16 years from discovery to the start of production, according to Paoli and Gul of the IEA.
鈥淭hese long lead times raise questions about the ability of supply to ramp up,鈥� they wrote.
Investment by automakers might 鈥渉elp to remove some of their partners鈥� risk and ultimately create more production,鈥� Bedwell said in an email.
Worldwide lithium resources are estimated at 80 million tons by the .
are the biggest at 21 millions tons, followed by Australia with 17 million and Chile with 9 million. China has 4.5 million tons of known reserves and the United States has 1 million.
Forecasts of annual global production range as high as 1.5 million tons by 2030. But demand, if EV sales keep rising at double-digit annual rates, is forecast to increase to up to 3 million tons.
Sales of battery-powered and gasoline-electric hybrid vehicles took off in 2021, more than doubling over the previous year to 6.8 million, according to EV Volumes, a research firm. Last year's sales rose to 10.5 million.
China accounted for 60% of last year's sales, two-thirds of production and three-quarters of battery manufacturing.
Ford plans to sell 2 million EVs a year by 2026. GM, with 2022 sales of 3.6 million cars, has plans for 30 electric models and North American production capacity of 1 million two years from now in 2025.
Motor Co.鈥檚 annual target is 3.5 million by 2030. VW, which sold 4.6 million cars worldwide last year, is aiming for 70% of sales in Europe and 50% in China and the United States to be electric by 2030.
President Joe Biden last year announced an official goal for half of all new cars sold in the United State to be electric or other zero-emissions technology by 2030.
As sales rise, so does government unease, especially in Washington and Beijing, about access to lithium and other minerals and the potential for strategic competition.
unit, PowerCo, signed an agreement with sa国际传媒 last August to develop suppliers of 鈥渃ritical raw materials鈥� including lithium, cobalt and nickel.
The German chancellor, Olaf Scholz, in a statement welcomed cooperation with 鈥渃lose friends鈥� on 鈥渞aw material security.鈥�
Last year, sa国际传媒 imposed limits on foreign involvement in production of lithium and other 鈥渃ritical minerals鈥� for batteries and other high-tech products.
China鈥檚 government the United States, sa国际传媒, Japan and other governments of misusing phony security concerns to hurt Chinese competitors in electric cars, smartphones, clean energy and other emerging technologies.
Other governments welcome Chinese investment.
China鈥檚 biggest lithium producer, Ganfeng Lithium Co., bought Argentina鈥檚 Lithea Inc. last year for $962 million. In 2021, Ganfeng bought Mexico鈥檚 Bacanora Lithium for $391 million. It is developing a project in the northern region of Sonora with planned annual output of 35,000 tons.
China's Tianqi Lithium Inc. owns 23.8% of dominant producer, Sociedad Quimicay Minera, or SQM.
About two-thirds of the world鈥檚 lithium comes from mines. That involves crushing rock and using acids to extract metals. It leaves toxic heaps of chemical-laced tailings.
The rest is extracted from salt lakes or from salt flats called salars in Chile and Bolivia. That can require vast evaporation ponds.
The industry is working on technology to extract lithium from hot springs, and clay deposits with less environmental impact.
VW has a five-year supply contract with Vulcan Energy Resources Ltd., which plans to produce lithium hydroxide from geothermal brine in Germany鈥檚 Rhine Valley.
Vulcan says its process uses no fossil fuels. That is a response to complaints EVs do little to reduce overall carbon emissions because energy for their manufacturing and charging usually comes from coal, gas and oil.
As they ramp up supplies, automakers face another bottleneck: Lack of refining capacity to purify raw lithium into battery material.
Tesla Inc. broke ground in Texas last month for a lithium refinery that CEO Elon Musk should produce enough for 1 million vehicles per year by 2025.
鈥淭he choke point is much more on refining capacity than it is on mining,鈥� said Musk in an April conference call with reporters.
Other manufacturers including BMW AG, which aims to make at least half its sales fully electric by 2030, are buying stakes in lithium refiners.
As for GM, 鈥淚 don鈥檛 know鈥� whether it will build its own refinery, Jacobson said.
鈥淲here I can help fund some expansion in exchange for guaranteed supply, that鈥檚 a good thing,鈥� he said. 鈥淲e should be open to doing that.鈥�
Smaller brands without their own lithium supply might be squeezed, according to Bedwell. He said they might be forced to pay more, which might threaten the existence of some.
鈥淐ertainly, mass-market players who don鈥檛 get their lithium strategy right will be at a disadvantage,鈥� said Bedwell.
Joe Mcdonald, The Associated Press
