The declining price of lithium will make a huge difference in the affordability of making and buying electric vehicles, and Elon Musk is particularly happy about it.
According to Bloomberg, an easing of supply pressures has seen the cost of lithium carbonate halved, while nickel and cobalt — other important materials used in the production of EV batteries — have also seen a drop in prices.
On a Tesla earnings call, company CEO Musk noted, per Bloomberg, that "lithium prices went absolutely insane there for a while," but he added that "deflationary pressures" seemed to be prevailing.
The price reductions will make production costs more affordable, making price cuts more feasible for EV producers — and prices better for customers. Tesla has already slashed the prices of its more expensive models in a bid to boost demand.
Sources like the international journal Nature and the University of Washington's Clean Energy Institute have said lithium-ion batteries are smaller and lighter and thus have more energy density than nickel-cadmium batteries while providing similar power output. They also "retain their charge for longer and are composed of much less toxic materials," per Nature.
The possibility of better lithium batteries is seen as one of the most crucial factors in the move away from dirty energy. While the generation of power via solar and wind is well-known and increasingly common, storing that energy is a bigger problem.
In cars especially, power storage is a vital factor in purchasing decisions. The ability to travel greater distances on a single charge is a huge pull factor, but having heavy batteries can be detrimental to an EV's performance. Lighter lithium batteries, therefore, are favored.
Tesla is constructing a lithium refinery in Texas, which is set to be completed in 2024, according to the Austin American-Statesman. According to Reuters, Musk said at the groundbreaking ceremony that the facility would produce enough lithium to help build around one million EVs by 2025.
"As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery grade lithium," Musk added.
Journalist Angela Piazza (@angelalpiazza) tweeted images from the groundbreaking.
Tesla CEO Elon Musk and Texas Gov. Greg Abbott led a groundbreaking ceremony today for the auto manufacturer's proposed lithium refinery in rural Nueces County. @callerdotcom @chasedrogers pic.twitter.com/dWOnmNM9cq
— Angela Piazza (@angelalpiazza) May 8, 2023
As shared by The Economist's Asia business and finance editor Mike Bird (@Birdyword), research from Morgan Stanley has revealed that the value of Chinese exports of lithium batteries, solar cells, motor vehicles, and motor parts is set to surpass those of mobile phones and computers in 2023.
Wild chart I'd missed from Morgan Stanley - exports of lithium batteries, solar cells, motor vehicles and parts from China are expected to outstrip mobile phones and computers this year. pic.twitter.com/wm4nE3DQuu
— Mike Bird (@Birdyword) July 27, 2023
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