Weekly Brief: Cheap, Clean Lithium is Key to BEV Success

A fire erupted on the surface of the Gulf of Mexico last week, as a gas leak from an underwater pipeline operated by Mexican oil company Pemex fueled the flames for more than five hours.

The blaze went viral on social media under the moniker “Eye of Fire” and captured attention around the world. It looked like something from the apocalypse, an end-of-days ordeal in which our oceans begin to spontaneously combust. The fact that the crude oil from Pemex was destined for cars and trucks that would spit it back out as CO2, which in turn would exacerbate our global warming crisis and make our oceans hotter, higher and more imperiled, made the news a fitting visual for the worldwide predicament that we find ourselves in.

As the Pemex fire unfolded, General Motors announced a multimillion-dollar strategic investment in a lithium extraction project located in the Salton Sea Geothermal Field in Imperial, California. Lithium is used to make the lithium-ion batteries that power electric vehicles (and smartphones and other digital devices) but the vast majority of the mineral is currently mined outside of the United States in China, Australia, Chile, Bolivia and Argentina.

The methods used in these lithium extraction projects, either pit mining or evaporation ponds, are often as environmentally unfriendly as an eye of fire in the Gulf of Mexico. The Ganzizhou Rongda Lithium mine on the Tibetan Plateau has leaked so many toxic chemicals into the nearby Liqi river that schools of dead fish, cows and yaks regularly float along the surface. The evaporation ponds in Chile use up so much water in the extraction process that they deplete the region’s already starved supply of two-thirds of its water.

GM claims that its new commercial collaboration will be different in almost every respect. Pursued in partnership with Australian company Controlled Thermal Resources (CTR), the project uses a closed-loop, direct extraction process powered by 100% renewable geothermal energy. The process, according to GM, will result in no production tailing and lower CO2 emissions and will return lithium-rich brine back into the ground, there to be extracted once again down the road. The Salton Sea Geothermal Deposit is so large that it could potentially meet one-third of the global demand for lithium and all of the US’s current lithium needs.

GM’s investment in CTR is part of its $35Bn global commitment to EVs and autonomous vehicles. Other automakers may piggyback on its lead but, as the first investor, GM will have dibs on all lithium produced by the first stage of the project, which is set to begin yielding lithium in 2024. “Lithium is critical to battery production today and will only become more important as consumer adoption of EVs increases, and we accelerate towards our all-electric future,” said Doug Parks, GM executive vice-president of global product development. “By securing and localizing the lithium supply chain in the US, we’re helping ensure our ability to make powerful, affordable, high mileage EVs while also helping to mitigate environmental impact and bring more low-cost lithium to the market as a whole.”

Affordability is key here, because EVs are still more expensive on average than their internal combustion engine brethren. If lithium-ion batteries become less expensive and can provide longer range, that’s a powerful combination that could turbo charge the EV revolution. Last week it came to light that Ford sold more all-electric Mustang Mach-Es in June than it did regular gas-powered Mustangs. That’s a shocking statistic given the Mustang’s storied history and broad popularity but it could be a sign of things to come, especially if carmakers can optimize lithium production.

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