The Real Brake on US EV Revolution

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/articles/the-real-brake-on-americas-elec…

Capital is pouring into U.S. EV and battery plants, but not into the foundations of a domestic battery industry, leaving the supply chain uncomfortably dependent on China

Unless that changes, the headlong pursuit of EVs in Detroit and California alike risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.

Chinese lithium miners Ganfeng Lithium and Tianqi Lithium do more work turning the metal they extract into useful chemical compounds than their big U.S. peer, Albemarle. Ganfeng even makes EV batteries itself. In their emphasis on vertical integration, the Chinese players are in some ways clean-energy takes on the likes of Exxon Mobil and Royal Dutch Shell —“integrated oil companies” that pump, refine and market their resources.

hmm How long before Taiwan is thrown under the bus?

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All the US ‘battery plants’ will use cells made in China. Or materials refined in China.

Going to be real nasty if the US and China relations turn sour.

Plus, 90% of the ‘chips’ are made in Asia - with a majority made in Taiwan. It will be a decade at least before the US ramps up to 30% of world chip production and by then, the Taiwanese will still be far ahead of us technology wise.

Both EVs and ICE cars are highly chip dependent.

Took my Chevy car into the dealer for a routine oil change. Their lot was essentially empty of new cars - maybe 10 trucks - and 2 passenger cars… either all sold as soon as they arrive, or just not getting them. Usually there are 30-50 cars there to choose from.

Chip shortages can last another year.

Tesla churning out EVs but most now sold overseas.

t.

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Unless that changes, the headlong pursuit of EVs in Detroit and California alike risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.

NOT equally problematic reliance, IMO.

If the the oil tankers from the middle east were to stop delivering oil (and assuming zero local production and no strategic reserve) we’d have a few weeks or a month or two until all the cars stopped. In reality we in the US get very little oil from the middle east. It is mostly domestic, Canada and Mexico.
At least with lithium all the existing vehicles continue to function for another few years or a decade until the batteries don’t work. And Lithium can and will be recycled.

All that said, we should develop some lithium and rare earth mining domestically.

Mike

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Mike:“If the the oil tankers from the middle east were to stop delivering oil (and assuming zero local production and no strategic reserve) we’d have a few weeks or a month or two until all the cars stopped. In reality we in the US get very little oil from the middle east. It is mostly domestic, Canada and Mexico.”

We produce at least 2/3rds in the US of our oil and the rest is imported from Canada, Mexico…and maybe some from the Caribbean.

we need no Arab oil.

However, if the tankers were to stop, the world economy would stop. Europe would come to a standstill. Japan would too as well as most ‘first world’ countries and everything else.

“At least with lithium all the existing vehicles continue to function for another few years or a decade until the batteries don’t work. And Lithium can and will be recycled.”

Only existing EV cars…which are now , what, 3% of the NEW sales and 1% of all cars on the road. BY 2025, maybe will be 5% of all cars on the road.

New EV car production would cease if China shut down Li exports.

“All that said, we should develop some lithium and rare earth mining domestically.”

It’s not the mining. It’s the carbon spewing toxic material polluting Li refining…which we don’t do. 95% of it is done in China. Get the raw Li, ship to China, have them make battery cells which they ship to US plants to ‘assemble batteries’.

Even our production of Li goes to China for refining.

t.

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Unless that changes, the headlong pursuit of EVs in Detroit and California alike risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.

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From a global warming/climate change point of view, being dependent on China for battery materials is much better than being dependent on Middle Eastern oil.

So the world needs to get busy and develop more battery material sources and battery manufacturing facilities.

Jaak

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I said: In reality we in the US get very little oil from the middle east. It is mostly domestic, Canada and Mexico.

t: We produce at least 2/3rds in the US of our oil and the rest is imported from Canada, Mexico…and maybe some from the Caribbean.

tap tap tap Is there an echo in here?

Bigger picture. In the short term (next decade) having an increasing market for EVs helps protect against oil supply shortages. Once EVs are the majority of vehicles (assuming we get there in 10 or 20 years) the danger that could be caused by lithium shortages is small since lithium isn’t a consumable fuel, but essentially part of the storage tank.
Additionally, new chemistries are possible and completely compatible with the entire EV charging infrastructure.
Meanwhile, oil (separate from the CO2 and air pollution) as a transportation fuel is problematic since once you build the infrastructure and engines you are stuck with it. Whereas, EVs can use whatever battery tech you want and has a diverse choice of ways to charge the batteries; such as home solar or grid (solar, wind, nuclear, hydro, coal, NG, etc.) You can even use gas to run a generator in an emergency. Try making your own gas. What are you going to do…grow corn.

The advantage of not being reliant on a single supply chain means the system is more reliable.
EVs even make gas cars more reliable since the peak demand on the pipeline infrastructure is eased.

Mike

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Unless that changes, the headlong pursuit of EVs in Detroit and California alike risks replacing the American driver’s dependence on Middle Eastern oil with an equally problematic reliance on Chinese battery materials.

…

… In reality we in the US get very little oil from the middle east. It is mostly domestic, Canada and Mexico.
At least with lithium all the existing vehicles continue to function for another few years or a decade until the batteries don’t work. And Lithium can and will be recycled.

All that said, we should develop some lithium and rare earth mining domestically.

Mike

Somewhat interesting, Alberta has found significant “potential” amounts of lithium, not sure if they have a plan to call it reserves yet.

Looks like Northern Ontario (that I escaped from long ago) has more advanced plans for their bounty?

Anymouse

Deposits in northwestern Ontario have enough lithium for almost 500,000 electric car batteries per year. A Sudbury-based company has big plans to mine and process a mineral that is a critical part of batteries in electric vehicles and portable electronics. Nov 9, 2021

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Mike:“Bigger picture. In the short term (next decade) having an increasing market for EVs helps protect against oil supply shortages.”

EV penetration will be 5% at best in 2025 and maybe 15% by 2030. There will still be a BILLION fossil fuel engines in the world at that time. From lawn mowers to jet aircraft to ATVs, boats, ferries, trucks, generators, weed whackers, and of course, the billion or so cars.

Only 30% of oil goes to transport. I assume you figured out that EV cars don’t need metal and plastics from fossil fuels? Or fabrics for seats or foam for seat cushions, copper wire, steel, etc? All made with fossil fuels.

Or that we don’t really need to eat? Heck, eliminate fossil fuel fertilizers and pesticides and only 4 or 5 billion people will starve to death quickly in 3 or 4 years. Oh, and I assume that half billion farm machinery will run on magic energy beads made from solar power.

Mike: Once EVs are the majority of vehicles (assuming we get there in 10 or 20 years) the danger that could be caused by lithium shortages is small since lithium isn’t a consumable fuel, but essentially part of the storage tank."

Maybe 20-30 years. the average life span of an IC car is now in the mid teens and many are on the road at 20-30 years old. Heck, in Cuba they still drive 1950s cars.

Mike:“Additionally, new chemistries are possible and completely compatible with the entire EV charging infrastructure.”

No one yet has built and shipped anything else but a Li battery for an EV other than teeny weenie cars on NiCad batteries and that mostly hybrids.

Mike:"Meanwhile, oil (separate from the CO2 and air pollution) as a transportation fuel is problematic since once you build the infrastructure and engines you are stuck with it. "

Unless you consider the ethanol joke, which takes as much fossil fuel per gallon to make it as it gives you even less mileage per gallon. A few years ago, manufacturers pitched ‘Flex fuel’ cars. Did anyone care? Did anyone buy ethanol at 30% more to put in their care (E85) which gave them 30% less mileage? Of course not. Now, I don’t even think you can buy a ‘flex fuel’ car.

Mike: Whereas, EVs can use whatever battery tech you want and has a diverse choice of ways to charge the batteries; such as home solar or grid (solar, wind, nuclear, hydro, coal, NG, etc.) You can even use gas to run a generator in an emergency. Try making your own gas. What are you going to do…grow corn."

The government won’t allow you to make your own ethanol. prohibited.

So far, no one has come up with anything other than Li batteries…

Mike:“The advantage of not being reliant on a single supply chain means the system is more reliable.EVs even make gas cars more reliable since the peak demand on the pipeline infrastructure is eased.”

so far, the Chinese control 90% of the world’s lithium refining. That won’t change soon.

So far, the oil infrastructure seems to work well. Other than idiots blocking pipelines in New England so they have to import NG from outside the USA.

EVs are not the panacea to solve supply chain problems.

t.

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t: Only 30% of oil goes to transport. I assume you figured out that EV cars don’t need metal and plastics from fossil fuels? Or fabrics for seats or foam for seat cushions, copper wire, steel, etc? All made with fossil fuels.

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U.S. Transportation fuel consumption accounts for over 70 percent of total U.S. oil consumption, and more than 65 percent of that amount is for personal vehicles. American drivers consume about nine million barrels of gasoline per day for personal transportation—378 million gallons every day—about 45 percent of total U.S. oil consumption.
— U.S. Energy Information Administration

Jaak

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Once EVs are the majority of vehicles (assuming we get there in 10 or 20 years)…

That sounds optimistic. The average age of a car on the road is currently over 12 years. Even if 100% of new car sales were suddenly EVs (they are currently less than 5%) it would take a dozen years to make it to a majority.

DB2

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That sounds optimistic. The average age of a car on the road is currently over 12 years. Even if 100% of new car sales were suddenly EVs (they are currently less than 5%) it would take a dozen years to make it to a majority.

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The change over will be faster because some countries, states and cities will prohibit ICE cars to be sold or even driven in those places.

Car manufacturers will stop making ICE passenger vehicles by 2030. People like to have new cars, so they can only buy EVs after 2030.

People will buy EVs because they will cost less to buy and cheaper to operate and maintain after 2030.

Jaak

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Big Yawn,

Nothing new here as t. is still stuck in the past and thinks oil is the be all and end all solution to all of mankind’s problems.

As there are multiple TRUSTED sources reporting on the development of clean energy lithium mining and purification in California it must be that anything that does not agree with his thinking is to be ignored.

Back to sleep.

OTFoolish

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Facts:

“The U.S. holds almost eight million metric tons of lithium in reserve, ranking it among the top five countries in the world, but only 1% of global lithium is currently sourced from the U.S., the report said.”

"In June 2021, the Biden Administration issued a National Blueprint for Lithium Batteries to address the supply issue. It called for increased domestic processing of raw materials, as well as more manufacturing infrastructure for battery cells and packs, and recycling infrastructure.

However, right now there is only one operating U.S. lithium mine, in Silver Peak, Nevada. Plans to open additional mines have been discussed, but they face opposition from environmentalists and local residents."

https://www.greencarreports.com/news/1134775_lithium-is-esse….

There is ZERO lithium processing in the USA and likely plans to develop it are at least 5 years and probably 10 before any processing actually starts after the factory/lab is built. Meanwhile, China will be 1000x ahead.

t

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“Like these so-called “fossil fuel” industries, mining for lithium is an extractive industry whose activities inevitably have impacts on the environment. Interestingly, the technologies and processing methods sound quite a bit like those deployed in the coal mining and oil drilling/fracking businesses.”

As the Wall Street Journal describes it, the extraction and processing of lithium can be a “messy process.” After describing an extraction process that is very similar to drilling for oil - a process that involves boring holes hundreds of feet into the ground and inserting tubes to facilitate the recovery of the minerals, the Journal then turns to the method of processing the ore:

"So long as it hasn’t taken place on a large scale in our own backyards, America’s environmentalist movement has thus far been able to largely ignore the environmental impacts of lithium mining happening in far off places like Australia, South America, Africa and China.

https://www.forbes.com/sites/davidblackmon/2021/03/16/rising…

All sorts of chemicals used to refine it - heat, sulfuric acid, toxic waste water…and of course, a lot of NIMBY from activists.

It often takes 20 years for a ‘mineral mine’ to get all the necessary permits to go from plan A to actual production.

t

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Hey t,

I brought Silver Peak, NV up on google maps. I cannot tell for the life of me what the heck I’m looking at!! I looks like a bunch of man-made lake-type structures with a tiny town next to it - and it’s out in the boondocks too.

https://www.google.com/maps/place/Silver+Peak,+NV+89047/@37…

'38Packard

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<i."Like these so-called “fossil fuel” industries, mining for lithium is an extractive industry whose activities inevitably have impacts on the environment. Interestingly, the technologies and processing methods sound quite a bit like those deployed in the coal mining and oil drilling/fracking businesses."

As the Wall Street Journal describes it, the extraction and processing of lithium can be a “messy process.” After describing an extraction process that is very similar to drilling for oil - a process that involves boring holes hundreds of feet into the ground and inserting tubes to facilitate the recovery of the minerals, the Journal then turns to the method of processing the ore:

"So long as it hasn’t taken place on a large scale in our own backyards, America’s environmentalist movement has thus far been able to largely ignore the environmental impacts of lithium mining happening in far off places like Australia, South America, Africa and China.

https://www.forbes.com/sites/davidblackmon/2021/03/16/rising……

All sorts of chemicals used to refine it - heat, sulfuric acid, toxic waste water…and of course, a lot of NIMBY from activists.

It often takes 20 years for a ‘mineral mine’ to get all the necessary permits to go from plan A to actual production.

^ The Forbes author clearly has no idea what he’s talking about. There are two basic ways lithium is extracted. One is you mine it from lithium bearing rock. Processing the ore is indeed messy and requires sulfuric acid, etc. That’s the processes used in Australia, although much of the processing occurs in China.

The other way does involve drilling, and involves drilling down to saline groundwater with high concentrations of lithium. The brine is pumped to the surface and the water is evaporated in ponds, then the resulting minerals are purified. That’s how most lithium in South America is produced. This guy is saying you drill for the ore…which is an absurd statement. He’s mixing up two completely different processes. You mine ore, you drill for brine.

Then he concludes his article by saying lithium mining will face the same challenges as the oil drilling industry. That doesn’t sound all that tough.

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Sitting at the Salton Sea for several years now has been a thermal electric plant which had been treating lithium as waste and had been pumping it back into the ground. Now that it is worth its weight in gold they are now processing it on site. There are already permits in place and construction has now begun on a new plant with the first new well having been drilled as they are starting the second well of an planned total of one hundred.

So it is full steam ahead on a lithium supply that is estimated to fill the world supply for the next decade. More like 20 MONTHS not 20 years.

OTFoolish

P.S. All done with NO pollution using self-generated electricity!!!

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I brought Silver Peak, NV up on google maps. I cannot tell for the life of me what the heck I’m looking at!! I looks like a bunch of man-made lake-type structures with a tiny town next to it - and it’s out in the boondocks too.

The article was somewhat incorrect. That’s not a mine. They are extracting lithium from groundwater brine. The lakes are the evaporation ponds.

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Tesla patent reveals Elon Musk’s ‘table salt’ lithium extraction process that could slash costs

Tesla has applied for a new patent that is revealing the lithium extraction process that Elon Musk vaguely described as “using table salt to basically extract lithium from ore” during Tesla’s Battery Day last year.

It could cut costs by more than 30%, according to the automaker.

During Tesla’s Battery Day last year, the automaker unveiled a lot of new technologies that it couldn’t spend a lot of time explaining.

One of those was that Tesla has developed a new lithium extraction process that Drew Baglino, SVP of engineering at Tesla, claimed would “result in a 33% reduction in lithium cost.“

https://electrek.co/2021/07/09/tesla-patent-reveals-elon-mus…

The Captain

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Then he concludes his article by saying lithium mining will face the same challenges as the oil drilling industry.

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What else do you expect an oil and gas guy to say about lithium. He is biased and wants to brand lithium as dirty. Here is his bio:

David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. He is the Editor of Shale Magazine and co-host of In The Oil Patch Radio, a nationally-syndicated weekly show. David has enjoyed a 40-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies, including Burlington Resources, Shell, El Paso Corporation, FTI Consulting and LINN Energy.

Jaak

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