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North American lithium supply chain moderator James Frith (left) and panelists (from left) Mujeeb Ijaz, Robert Privette, Rakesh Nahta, Hideki Ozawa and Kevin Rhodes. (Chris Clonts)

Leaders Optimistic North America Lithium Supply Gap Can be Eliminated

Facing a deficit of around 500 GWh of North America-supplied lithium for the EV market, a panel of industry leaders talked about the path toward a solution.

At the Battery Show North America in Novi, Michigan, this week, a panel of leaders addressed North America’s lithium supply challenges and how aggressive movement from companies and governments will attempt to address the problem.

Moderator James Frith, a principal with Volta Energy Technologies, opened by laying out the extreme challenges, including the fact that a decade ago, 75% of the world’s lithium supply came from China, Chile and Australia. “By 2030,” he said, those countries’ share of all supply will be less than 50% He laid out an even starker number: That next year, 2024, there will be roughly 850 GWh of demand in the North American lithium market, but only 350 GWh of supply.

Given the importance, from both geopolitical and supply-efficiency perspectives, of securing more North American-based lithium supply for the rapidly advancing EV market, it may be surprising that companies think the challenge can be met. Mujeeb Ijaz, founder and CEO of battery manufacturer Our Next Energy, expressed optimism. “We’re in a rapidly evolving story,” he said. “I think we’re going to cure the gap in a matter of years. In just one year, we’ve seen 15 factories announced and $70 billion in investments. I think next year [will only see that number grow].” Ijaz also said that managing just the lithium supply provides only a partial solution. As more companies like his bring non-lithium-based batteries to market, demand should drop. “Demand management must be part of the solution,” he said.

Robert Privette, the business development manager for cathode supplier Umicore, said he didn’t think all this need would cause an unsustainable increase in lithium prices. “We just can’t afford to have more expensive lithium,” he said. “We just can’t afford the margins.” That means firms will rush in to help meet demand and keep prices down.

Privette was also one of the majority of panelists who said maintaining a diverse supplier list was key. One clear drawback of relying on a single supplier is figuring out what happens if the supplier can’t deliver the correct purity of lithium for batteries? There must be other suppliers to draw from. Frith added that, as OEMs begin to contract directly with second-tier mining companies, which he called “junior miners,” it was just impossible that they will all be able to provide the proper purity.

Ford senior manager of value chain and quality, Rakesh Nahta, said that like other aspects of the supply chain, mining requires the efforts and investments of companies like his, government and other suppliers like cathode makers. He mentioned that the level of investment would be in the billions of dollars. “You cannot expect just one supply chain book [correct word?] to do this. This has to be managed by all parties.”

Kevin Rhodes, vice president of batteries and advanced fuels at Caterpillar, said having North American and local suppliers online had the additional benefit of making policy work easier. “Local suppliers are a big deal in helping us influence local and regional policy interactions,” he said.

Our Next Energy’s Ijaz laid out the three ways he thinks the Inflation Reduction Act has helped the supply chain. “First, it gave us companies an advantage in sourcing U.S. suppliers, and emerging U.S. suppliers fit in a category every U.S. OEM wants us in the supply chain,” he said. “But no one wants to take the risk on emerging a supply chain. So there has to be some incentive. Second, it gave us a cost advantage. We are leveling the playing field in terms of our capability to enter the market. ... The third is that it gave a consumer advantage to buying a product through a tax credit where the consumer actually knows whether the products comply or not. And that's like a vote of confidence that the product manufacturer gets.”

Also on the panel was Hideki Ozawa, vice president of lithium hydroxide for Albermarle Energy Storage.

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