The mission to replace gas-powered cars with electric vehicles relies on rare metals and the mines they come from.
Among the pandemic’s many disruptions, in early 2021 auto makers cut production because of a shortage of semiconductors. Car manufacturers today already spend more money on silicon than on steel, and that goes double for the makers of electric vehicles (EVs). The mainstream arrival of EVs owes as much to silicon, for power control, as it does to lithium, for energy storage. But the cost of automotive lithium batteries dwarfs the costs for silicon and steel combined. If EV aspirations are fulfilled, the next automotive supply-chain disruption—and there’s always going to be a next time—will center on battery materials.
The aspirations are frenzied. A growing list of governments have already implemented, or plan to implement, bans on gasoline-powered cars. The world is going to build a lot of EVs, and to help make that possible, companies in Europe and the U.S. are furiously building dozens of gigafactories—Elon Musk’s term for massive EV battery factories. The upshot is that every $2 billion gigafactory will, over a decade of operation, purchase some $20 billion of battery minerals and materials. One might reasonably wonder: Purchase from where? And who benefits?
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Mark P. Mills is a senior fellow at the Manhattan Institute; a partner in Cottonwood Venture Partners, an energy-tech venture fund.
This piece originally appeared in The Wall Street Journal