There is a lithium shortfall for gigafactories announced, and a good way to understand it is that it takes at least five to seven years to build a lithium mine. With all the money in the world, you can build one in five years. But it takes 24 months to build a gigafactory, so that’s the disconnect. And still the automakers are announcing all these battery plants. At the same time, they should be announcing new lithium mines—or new lithium-refining capacity, at least, if they didn’t want to get into mining—because they go hand in hand. But that’s not happening yet. And as a result, any of the EV goals between 2026 and 2030—it’s a red alert. Most of these guys won’t even meet a fraction of their EV targets because of that.

Listen to an interview reported by Morning Brew Interview with Simon Moores, CEO of Benchmark Mineral Intelligence in December 2021. (listen here)

While there is plenty of lithium on the planet, it isn’t being extracted and refined quickly enough to keep up with the rapidly growing demand for batteries. By 2030, there’s projected by most to be a lithium deficit between 455,000 and 1.7 million metric tons each year.

However, I suggest this projection is too low. There is about 37kg of LiCO₃ equivalent lithium in an EV battery, and 80 million cars currently manufactured globally. If a conservative 50m EVs are expected into production by 2030, the total demand for EV batteries would be 1.7 million Tonnes. I suggest the majority of vehicles will be EV, or 80 to 100m EVs. Include the production or conversion of trucks, buses and rail. Current production is about 0.22m tonnes. Lithium mining will be 30 times to 40 times increase, as there will be lithium for grid and household storage. We have to decarbonise the world to reduce CO2 emissions and batteries provide intermittency control in a renewable energy solution.

That is a lot of mines. Eg Lake Resources using DLE technology projects 25 kTpa (kilo Tonnes per annum). It would need 40 new mines equivalent capacity. There are about 150 companies on the ASX in this area (View the Google Sheet here)

CATL Lithium Shortfall for Gigafactory of 430GW By 2025

China’s largest battery producer, CATL’s, battery installation in China for the full year 2021 was 80.51 GWh, accounting for a 52% market share (China Automotive Battery Innovation Alliance Jan 2022) CATL got pinged by the Stock Exchange for a large share issue to fund their expansion, and said it had lithium-ion battery capacity of 106.41 GWh from January to September 2021, and new production has a design capacity of 220 GWh to 240 GW pa. They say they need to double capacity to 450GW by 2025, by adding 135GW per year.

Have lithium costs affected the price of lithium-ion batteries over the last few years?

Batteries have been going down in price and manufacturing costs the last 5 years, since the creation of Tesla’s Gigafactory: scale allows to make them cheaper.
Raw material costs have been low, but what’s happened in the last year is raw material costs, especially lithium, are rising significantly. Lithium is the big one here. And at the same time as these battery costs keep dropping, raw materials are a much bigger proportion of the pie—the cost pie. So lithium prices have gone up and they’re now impacting battery cells.

What does it mean when you say there’s a lithium shortage?

So the “structural shortage” is what the commodity industry calls it. That’s when there’s literally not enough capacity in the industry to meet that demand. This year was the year where supply got tight and then it has just fallen into shortage in the last few months. It’s a very clear shortage, a structural shortage. It’s kind of no going back.

Lithium Shortfall for Gigafactories – are automakers aware?

It’s funny, I think OEMs are quite a unique beast in this sense. The OEMs only plan to build battery plants. They don’t think about the raw materials. And that’s because they don’t come from that world. The traditional automotive supply chain is built to serve them, and they’re used to having everything available. So they announce new plants, but they do not announce the supply chains.

But the difference now with the supply chain for electric vehicles—it’s being built from scratch and doesn’t exist at the scale they need, so they don’t think about the raw materials, and we call this the great EV raw material disconnect. Two years ago, they weren’t even thinking about batteries. They are thinking about batteries now, which is good. But they’re still not thinking about raw materials. And that’s a huge risk to anyone that’s really making EVs beyond 2025 or 2026, which is nearly everyone.

Will lithium production increase in the coming years?

The next big one that’s scheduled to come on stream next year—and it’s the first big lithium chemical operation in maybe 15 years— it’s Lithium Americas in Argentina. Back in 2011, they started it. It’s now 2021, and it’s just about coming on stream.

USA Battery Factories

For the Google Sheet of batteries from ABB Report (Link here) or download from Google Sheets

Rank	Company	Location	Start Date	Capacity GWh	Expanded	Notes
1	Panasonic-Tesla	Gigafactory 1, Nevada, US	2016	35	39	by 2021
2	LG Energy Solution (LG Chem)	Holland, Michigan, US	2013	3	24	By 2028
3	Envision AESC	Smyrna, Tennessee, US	2012	2	8	By 2028
4	Imperium3	Imperium, New York, US	2019	3	15
5	SAFT	Jacksonville, Florida, US	2011	1	1
6	A123 Systems	US Plant 1, Michigan, US		0.15	0.15
7	A123 Systems	US Plant 2, Michigan, US		0.15	0.15
8	Samsung SDI	Auburn Hills, MI, US				production and sales
9	Ultium (GM-LG Chem)	Lordstown, Ohio, US	2022	30	30
10	SK Innovation	2nd Plant, Georgia, US	2023	11.7	12	US ban on SKI for 10 years except for VW and Ford puts plants in doubt
11	Do Floride Chemicals DFD / KORE Power			10	10	Energy Storage applications
12	SK Innovation	Commerce, Georgia, US	2022	9.8	20	US ban on SKI for 10 years except for VW and Ford puts plants in doubt
13	Tesla	Austin, Texas, US	2022		100	CY, MY, M3
14	Tesla	Gigafactory 2, Buffalo, New York, US	2020	2	4	Energy Storage applications
15	Tesla	Fremont, California	Fremont, California		10	Vehicle, expansion planned
16	Akasol – Gigafactory 2	Detroit, Michigan, US	2021	0.4	2	by 2023
17	SVOLT	US
18	Microvast	Clarksville, Tennessee, US	2022	2
Totals				110.2	275.3

European Battery Factories

For the Google Sheet of batteries from ABB Report (Link here) or download from Google Sheets. The sheer number means there will be a lithium shortfall for gigafactories announced.

Rank	Company	Location	Start Date	Capacity GWh	Expanded	Notes
1	LG Energy Solution	Wroclaw, Poland	2018	45	70
2	SK innovation	Komarom, Hungary, Plant 1	2020	7.5	7.5
3	Samsung SDI	Goed, Hungary	2020	2.5	20	by 2028
4	Envision AESC	Sunderland, UK	2010	2.5	2.5
5	Leclanche	Willstatt, Germany	2020	1	2.3	by 2024
6	AMTE Power	Thurso, Scotland	2022	1	5
7	Bollore	Ergue-Gaberic, France	2009	0.5	0.5
8	Akasol	Langen, Germany	2018	0.3	0.8
9	Liacon	Ottendorf-Okrilla, Dresden, Germany	2019	0.3	0.3
10	Tesvolt	Germany	2020	0.25	0.25	Energy Storage
11	Samsung SDI Battery Systems	Premstatten, Graz, Austria	2015			Former plant of Magna Steyr
12	AMTE / BritishVolt	Blyth, near Newcastle, UK	2023	35	35
13	Italvolt	Italy	2024	35	70
14	BMZ / Terra & others	Karlstein, Germany	?	34	34
15	Morrow Batteries	Arendal, Norway	2024	8	32
16	Listrom	North Rhine Westphalia, Germany	?	30	30
17	SK innovation	Ivancska, Hungary, Plant 3	2024	5	30
18	Zorlu / GSR Capital	Turkey	2022	25	25
19	Tesla	Gruenheide, Germany	2021			Gigafactory 2022
20	Northvolt Zwei	Salzgitter, Germany	2024	16	24
21	Verkor	France	2023	16	50
22	CATL	Erfurt, Thuringia, Germany	2022	14	100
23	Microvast	Brandenburg, Germany	2021	12	12
24	Northvolt Ett	Skelleftea, Sweden	2021	8	40	by 2024
25	Inobat	Voderady, Bratislava, Slovakia	2021	0.1	10
26	SK innovation	Komarom, Hungary Plant 2	2022	9.8	16
27	Automotive Cell Company (SAFT/Stellantis)	Hauts-de-France, France	2023	8	24	by 2030
28	Automotive Cell Company (SAFT/Stellantis)	Kaiserslautern, Germany	2024	8	24	by 2030
29	Samsung SDI	Plant 2, Goed, Hungary	2021	7.5	7.5
30	Farasis Energy	Bitterfeld-Wolfen, Germany	2022	6	16
31	SVOLT	Uberhelm, Germany	2023	6	24
32	Lithops / FAAM	Teverola, Napoli, Italy	2021	0.2	2.5	(military, industrial and storage applications)
33	FREYR	Mo I Rana, Norway	2022		40
34	GSR Capital	Trollhättan, Sweden	2020?		25
35	Panasonic	Norway	Not yet announced			MoU with Equinor & Norsk Hydro
36	Blackstone Resources	Braunschweig, Germany			Initially 100m battery cells
37	Akasol – Gigafactory 1	Darmstadt, Germany	2021	2.5	5
Totals				346.95	785.15