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AMERICAS REGIONS


Power up: SK Innovation has invested $2.6bn in two battery plants based in Jackson County, Georgia


shipping in bulk over long distances, says Vanessa Witte, a senior analyst at natural resources consultancyWood Mackenzie. The case for building battery facilities at


close proximity to existing automotive plants has also been borne out by the risks of just-in- time supply chainmodels, which sacrifice resil- ience for efficiency. “Our international supply chain has its


blind spots,whichbecomemoreapparentwhen there are events such as the pandemic,” says Mr Rolfe. “As a result, we’ve seen more companies trying to shore up their local supply chains.” In the coming years, these difficulties are


likely to beamplified as a looming supply short- age of lithium becomes more apparent. Benchmark Mineral Intelligence estimates that the global annual supply of raw lithium (440,000 tonnes) will meet the growing demands of the EV market (432,000 tonnes) for 2021, but demand will outstrip supply by 60% (at 2.4 million tonnes to 1.5 million tonnes) by the end of the decade. “There’s no real resource constraint, but if


countries or original equipment manufactur- ers want to achieve the kind of EV sales they are talking about, there needs to be more investment in mine projects in the near term,” says Ms Witte. This realisation has promptedGMto take a


more active interest in upstream investments, such as its collaboration with the California- based renewable energy company, Controlled Thermal Resources (CTR), to “secure local and low-cost lithium”. CTR’s closed-loop, direct extraction process also results in lower carbon dioxide emissions when compared to tradi- tional processes such as pit mining or evapo- ration ponds, GM claims — something that


August/September 2021 www.fDiIntelligence.com


REGION China


Europe


North America Asia (excl China) Others


CHINATOWIDENLEADINEVBATTERY PRODUCTION BATTERY CAPACITY (GWH/Y) BY REGION


2020 567.9 50.9 57.0 78.6 0.0


2025(ESTIMATED) 1995.7 343.6 252.5 122.3 1.8


will be increasingly important as the US seeks to regulate the environmental impact of its supply chains. Not all automakers are diving headlong


into new battery projects, however. “We don’t have to scale today to justify our own dedicated battery plant,” Hau Thai-Tang, Ford’s chief product platform and operations officer, told CNBC during an interview inMay 2021. “But by 2025, as we bring on the F-150, the


E-Transit and another battery electric vehicle that we’ve announced, we’ll have enough vol- umeinNorthAmerica to justify ourownplant.” Moving forward, Mr Moores expects to see


consolidation in the space, with some automakers acquiring the battery manufac- turers with whom they initially set up joint ventures. But in the final calculation, the lim- iting factor will either be a shortage of lithium compounds or lagging consumer demand for EVs. Federal tax credits to incentivise electric passenger cars were phased out for most automakers at the end of 2019, dramatically raising costs for the consumer. In order to bal- ance these two forces, the US government will need to find the right mix of policies to make EVs affordable and build out the domestic sup- ply chain capacity.■


63


2030(ESTIMATED) 2681.0 778.2 486.6 139.3 15.0


Source: Benchmark Mineral Intelligence


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