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While people and governments all over the world grapple with insanely high fuel prices, one might think EVs are better in this regard. Well, EVs seem to have another problem altogether - rising prices of Lithium. Lithium is the main element used in a modern Lithium-ion battery and an increase in prices of Lithium is indeed alarming for the EV world.
Elon Musk, CEO of Tesla recently tweeted about this problem. The tweet said, "Price of lithium has gone to insane levels! Tesla might actually have to get into the mining and refining directly at scale, unless costs improve." He also said the prices of lithium has increased multiple times this year and the general trend too predicts that lithium prices will continue to rise.
Tesla is a pioneer of sorts in the EV world. It is the brand that made EVs mainstream. It was Tesla under the leadership of Elon Musk that proved to the world that EVs don't have to be slow and ugly, but can be fast and pretty. Tesla also showed the world that range anxiety was a thing of the past.
It is no secret that Tesla uses Lithium-ion batteries to power its cars. It is said that a Tesla battery pack that weighs 1,000 kilograms and produces about 70kWh contains about 63 kilograms of lithium in it. For every 1,000 such batteries produced, Tesla needs 63 tonnes of lithium and getting it is neither easy nor cheap.
There are only a handful of lithium mines in the world and these mines and their sellers make it very expensive to make one. While the exact cost of manufacturing a Tesla battery is not known, the cost of replacement is known. Each battery module costs between $5,000 and $7,000. Tesla's cars use four or five modules, taking the total battery replacement cost to between $20,000 and $35,000.
The cost of these batteries then is already high. If the price of lithium keeps increasing, Tesla won't have any other option but to hike prices of its vehicles and so on. Hence, Elon Musk has said that the brand is considering mining and refining lithium on its own. This takes the markup added by the lithium mining companies out of the equation.
Tesla might end up employing a SpaceX strategy. SpaceX is also headed by Elon Musk and the company has revolutionised space travel by reducing the expenses. It managed to the do this by building almost all of the parts required for a rocket, thereby cutting down on imports and the reliance on other companies.
Now, Tesla might also have to cut down on its reliance on lithium mining companies in order to continue making brilliant EVs without bumping up the cost significantly. We will have to wait and see what Tesla does about the rising costs of lithium. But this tweet by Elon Musk has exposed a problem within the EV industry that has for a long time been plaguing EVs.
The Lithium-Ion Battery Problems That EV Manufacturers Face
The primary problem is that the materials used in the manufacture of these modern batteries are rare earth minerals. This simply means that these batteries are found only in certain parts of the world and mining in these parts is already on in full swing.
Lithium forms only one chunk of the problem. Battery manufacturers also have to source cobalt and nickel which are the other two major components of a lithium-ion battery. These minerals are not available easily either.
Mining the earth for these rare-earth minerals first gained popularity when mobile phone manufacturers first switched to lithium-ion batteries. Though research on lithium-ion batteries dates back to the 1960s, the first mainstream of these batteries came about in 1990 when Sony started producing and selling rechargeable lithium-ion batteries.
Other brands soon followed suit and before we knew it, all electronic gadgets came to be powered by lithium-ion batteries. Things were fine until the point where a lithium-ion battery was plonked into an electric vehicle. The quantity of lithium, cobalt, and nickel used in a small 5,000mAh battery that powers your smartphone is almost negligible.
However, the amount of minerals needed to power a large 63kWh battery as aforementioned, is massive, and things naturally get worse when every single automobile manufacturer in the world decides to go the EV way. The demand for these minerals have increased manifold in the last few years. The numbers do add up and it is quite alarming indeed.
In 2010, global lithium-ion battery production was around 20GWh (Gigawatt-hours). By 2016, the number had increased to 28GWh, which is not bad at all. Then comes the number for 2020, which is 767GWh, and this is massive. Studies and trends have predicted that the global production of lithium-ion batteries is expected to touch around 1,100GWh!
That is a massive amount of Li-ion batteries being produced and all of this production has to be fed by a select few mines across the world. Well, as expected, prices of these minerals, especially that of lithium are bound to increase as mining costs increase. Also, unlike Tesla, there are hundreds of smaller EV manufacturers that cannot get into the mining of lithium.
As a result, mining companies are digging deeper and deeper into the earth's precious resources, refineries are working relentlessly to keep up with demand for Lithium, Cobalt, and Nickel, and there are some mines where working conditions are not great at all. In fact, there might be more than just one labour law violated in order to get these minerals out.
With these issues in mind, it is easy to see that the EV industry is going to face more challenges than just charging infrastructure and range anxiety. There's a lot to be done if electric vehicles powered by Li-ion really have to become the alternative to internal combustion across the world.
Thoughts On The Problems Of Lithium-Ion Batteries
Most electric vehicle owners are under the impression that they are saving the planet. They drive around with a smile on their face and try to convince others to buy an EV too, However, there's more happening behind the making of that Lithium-ion battery that powers their car or two-wheeler and that is something not many are aware of.
Will EVs really be the vehicles of the future? Almost certainly, electric vehicles are the future. Make no mistake, EVs are here to stay and electricity is the future. However, the way we store that electricity and use it to power vehicles will certainly change.
Lithium-ion batteries will soon fade out. Unfortunately, we do not know what will replace Lithium-ion, but we do know that scientists are working on it. It is only a matter of time now.