Electricity’s Holy Grail: The Lithium Rush is On!

"Global Race to Secure Lithium Resources Intensifies as Demand for Electric Vehicles Surges, According to S&P Global Report"

The demand for lithium-ion batteries in the United States has reached a record high in the first quarter of 2023, highlighting the urgent need to ramp up domestic production capabilities to meet the soaring demand. According to a report by S&P Global, U.S. imports of lithium-ion batteries in Q1 2023 reached 235,386 metric tons, up 66% from the previous year. Unfortunately, the U.S. doesn’t produce enough of the silvery metal it will need as it only has one source of domestic lithium production. As a result, American Lithium Corp. (AMLI) is playing a major role in filling the supply gap by managing two of the biggest lithium deposits in the Americas.

Tesla, the leading EV company, is planning to produce 20 million EVs each year by 2030. It delivered just above one million units in 2022 but used around 42,000 tons of lithium in 2021. That’s more than 5x the combined lithium consumed by Ford and GM, according to BNEF data calculations. To meet its ambitious goal, Tesla would need a huge volume of lithium to make the required batteries. Earlier this year, it broke ground in Texas for its lithium refinery plant worth $1 billion. In its recent Master Plan report, Tesla analyzed that lithium is responsible for about 20% of the materials needed to deliver the energy storage in batteries for EVs relative to 2023 USGS data. With that data, the giant EV maker estimated that it needed a total of $374 billion to invest in mining ($170B) and refining ($204B) lithium (Li).

Global lithium production was at 100,000 tons or 90+ million kg in 2022. The International Energy Agency said that the world needs up to 6x more of that by 2030. That’s a big opportunity for companies like American Lithium to serve with their large lithium reserves in highly attractive jurisdictions. Nevada is home to the only lithium mine in the US – the Silver Peak mine. The operation is run by Albemarle Corp base in California. But more projects are in the pipeline, alongside American Lithium’s TLC. Nevada is also dubbed as the “Silicon Valley of Lithium” whose silvery metal reserves are vital for both the state’s and the country’s economy. Strong government support had made undergoing projects possible, attracting massive investments.

For instance, Ford Motor inked a deal last year to source 7,000 metric tons of lithium from an Australian-owned Rhyolite project. General Motors also invested $650 million in the state’s largest claystone deposit near the TLC project of American Lithium. Similar deals also abound, with major battery manufacturers signing supply deals with proposed lithium projects in Nevada. And at Reno’s event last March, the Department of Energy announced a conditional $2 billion loan guarantee for a Nevada-based battery recycling firm. Energy Secretary Jennifer Granholm pointed out that the state is flush with more projects that are all part of a rising lithium battery supply chain.

The entire process, from mining to recycling of the critical mineral – otherwise known as lithium “loop”, is possible within state lines, which is unheard of domestically. Industry estimates say the lithium-ion battery market will reach over $100 billion by 2030. And Nevada is the only state that allows for each phase of the lithium lifecycle. With Tesla’s ambitious goal of producing 20 million EVs each year by 2030, it is clear that the demand for lithium will only continue to rise. American Lithium Corp. and other companies with large lithium reserves in highly attractive jurisdictions will play a major role in filling the supply gap and meeting the soaring demand.

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Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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