Electric cars, have rushed to raw materials for batteries

The European Union’s indications of the 2035 ban on thermal cars are accelerating on battery – powered cars. And by the dependence on some essential raw materials for accumulators

Corrado Canali

– Milan

From an eventuality, the transition to electric motors has become a certainty, and the times to achieve it seem to be getting tighter. In fact, in recent days there has been a lot of talk about the European Parliament’s vote to ban the sale of petrol or diesel cars from 2035 and the EU Council’s subsequent decision to ratify the Strasbourg election, albeit with a possible revision in 2026. Lithium, cobalt , rare earths and many others: These elements, which are indispensable for electric car batteries and for energy conversion more generally, have opened up what can be considered a true gold rush albeit in the modern age. Bringing them to light requires, and will increasingly require, an unprecedented financial effort.

the basic batteries

And the demand from electric car manufacturers will increase as they are committed to developing versions that are more energy efficient and cheaper to produce. Among the raw materials to build them is lithium, an element that is very common but which is almost always associated with other elements and compounds, making it harder to find. The car manufacturers want and can never come unprepared for the agreement with electrification and put a number of strategies in place to be able to secure the indispensable raw material supplies with direct investments in extraction.

POSSIBLE JOINT VENTURES

To do this in the best possible way, builders have long understood the convenience of joining mining consortia through joint ventures with the aim of collaborating not only in the sites already discovered but also in the search for new areas to excavate, especially in the United States. The pandemic, as it is known, has given a new impetus to the movement towards direct control of minerals because it has shown how fragile supply chains are, especially batteries for electricity.

EMPLOYEES FROM ASIA?

No thanks. Many have pointed out the risk of being too dependent on Asia. “When supply chains are concentrated among a few companies or geographic areas, they become fragile and are not resilient,” explains Sam Abuelsamid, chief analyst at consulting firm Guidehouse Insights. The expert reported the designers’ point of view, which can be summarized as follows: do not leave the mining activities in the hands of local suppliers in the future, if of course it will be possible.

EXAMPLE OF TESLA

Elon Musk’s brand is working to buy virtually all of the lithium it needs, about half of the cobalt and a third of the nickel, directly from nine mining companies, to ensure continuous access to the raw materials needed to produce batteries at their own factories. The company wants to be autonomous and at the same time work on denser batteries, able to save larger amounts of energy for the same volume, to increase the autonomy of the vehicles based on their spread.

ANOTHER EXAMPLE?

General Motors, which has invested in a low-cost lithium mining project launched by Controlled Thermal Resources called Hell’s Kitchen Lithium Power, based in Salton Sea Geothermal Field in California’s Imperial Valley. The benefit for housing would be twofold: to secure enough raw materials to meet the growing demand for electric cars, but also to protect itself from any criticism regarding ethical issues surrounding extraction.

CHINA IS ALSO MOVING

The opportunities offered by the transition to the electric motor are of great interest to countries like China with manufacturers ready to face the near future. For example, BYD, which was born as a manufacturer of smartphone batteries and in less than 20 years has become one of the leading electric car manufacturers in the world, has planned investments of almost 500 million euros in lithium mines. The company can benefit from the presence of some large Chinese companies in Africa, which have outsourced the management of important mineral deposits, which will be useful in meeting the high growth demand.

the European groups

Mercedes and Stellantis have founded Acc, which stands for Automotive Cells Co, a company for the development and production of car batteries with an expected investment of 7 billion euros: the Italian giga factory to be built in Termoli. Last year, on the other hand, BMW invested around € 330 million in a project in Argentina to extract lithium. Finally, Volkswagen has started a program to convert part of the factories and plans to invest $ 2 billion in the construction of factories where batteries can be produced.

difficulties

Producing batteries is not easy both from a practical point of view and for the use of proprietary technologies protected by patents. For this reason, when the availability of raw materials is guaranteed, car manufacturers prefer to seek partnerships with companies with some experience in the sector. In 2021, General Motors started an investment of about 2.2 billion euros to develop a battery factory in Tennessee in the USA in collaboration with LG, the well-known Korean consumer electronics company. Tesla had done the same by starting a close collaboration with Japanese Panasonic for some years.

CHANGES IN ELECTRONICS

The raw material crisis had a major impact on production capacity: in 2021 alone, it is estimated that 7.7 million fewer cars were produced than expected, precisely because the components were missing. As a result, the automotive industry aims to make their commercial relationships with Qualcomm and Nvidia, among the leading microchip manufacturers, increasingly direct, reducing the reliance on intermediaries who actually produced parts for vehicle electronics, but externally.



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