Top Reasons for Supply Chain Problems in the EV Industry:
- Lithium Supply Problem
- Cobalt Issues
- Shortage of Nickel
1. Lithium Supply Problem:
Based on a Bloomberg Report, Lithium, the wonder metal at the heart of the global shift to electric cars, is in a full-blown crisis. Demand has outstripped supply, pushing prices up almost 500% in a year and hindering the world’s most successful effort yet to halt global warming.
The shortage of lithium is so acute that in China, which makes about 80% of the world’s lithium-ion batteries, the government corralled suppliers and manufacturers to demand “a rational return” to lower prices. Analysts at Macquarie Group Ltd. warned of a “a perpetual deficit,” while Citigroup Inc. nearly doubled its price forecast for 2022, saying an “extreme” rally could be coming.
Based on CNBC Report, The United States has a lithium supply problem. Lithium-ion batteries are in everything we use — in phones, laptops, tablets, cameras and increasingly cars. Demand for lithium-ion batteries has risen sharply in the past five years and is expected to grow from a $44.2 billion market in 2020 to a $94.4 billion market by 2025. This is largely due to the boom in electric cars.
Content/Timestamps of the Video
- 00:00 — How Tesla’s Battery Mastermind Is Tackling EV’s Biggest Problem
- 18:31 — Why The U.S. Has A Massive Lithium Supply Problem
- 34:39 — How Removing Cobalt From Batteries Can Make EVs Cheaper
Based on this CNBC Report
Nearly every major automaker has announced a transition to electric vehicles. Tesla delivered almost one million cars in 2021, and electric vehicle companies like Rivian and Lucid are rolling new models off the line. In order to power all of these EVs, we will need batteries, lots of them. Electric vehicle growth will be responsible for more than 90% of demand for lithium by 2030, according to Benchmark Mineral Intelligence. This vital mineral in rechargeable batteries has earned the name “white gold” and the rush is on.
CNBC
2. Cobalt Issues:
Based on the CNBC Report, Cobalt is one of the most expensive materials found in lithium-ion batteries. Cobalt extraction is largely concentrated in the Democratic Republic of Congo, where it is linked to human rights abuses and child labor, while cobalt refinement is almost exclusively done in China, making cobalt part of a tenuous supply chain.
These are some of the reasons why battery manufacturers like Samsung and Panasonic and car makers like Tesla and VW, along with a number of startups are working to eliminate cobalt from lithium-ion batteries completely.
3. Shortage of Nickel:
Based on this CNBC Report, As the EV industry ramps up, it could be hindered by a global shortage of nickel, a key component in most lithium-ion batteries. Tesla recently signed a deal to source nickel from a proposed mine in Minnesota, though mining raises a variety of environmental concerns that EV automakers must grapple with if they want to source battery minerals responsibly.
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