{"id":3745,"date":"2023-08-05T10:15:01","date_gmt":"2023-08-05T08:15:01","guid":{"rendered":"https:\/\/a2kadvisory.com\/?p=3745"},"modified":"2023-08-29T19:34:48","modified_gmt":"2023-08-29T17:34:48","slug":"lithium-industry-needs-over-116-billion-to-meet-automaker-and-policy-targets-by-2030","status":"publish","type":"post","link":"https:\/\/a2kadvisory.com\/fr\/2023\/08\/05\/lithium-industry-needs-over-116-billion-to-meet-automaker-and-policy-targets-by-2030\/","title":{"rendered":"Lithium industry needs over $116 billion to meet automaker and policy targets by 2030"},"content":{"rendered":"
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SOURCE: BENCHMARK LITHIUM ION BATTERY DATABASE Q2 2023<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The lithium industry needs to invest $116 billion by 2030 if the world is to meet the ambitions targets set by governments and the largest automakers, according to a Benchmark analysis.<\/p>

This \u201chigh case\u201d scenario is based on automakers hitting their targets and electric vehicle penetration increasing on the back of enacted decarbonisation policies from governments around the world.<\/p>

This is more than double the $54 billion investment needed to meet Benchmark\u2019s base case lithium demand scenario. This is an updated calculation following the\u00a0investment analysis Benchmark developed last quarter<\/a>.<\/p>

This money needs to go into building new mines and refineries,\u00a0as well asexpanding existing assets<\/a>. Even if every asset in the pipeline came online on time and hit their projected lithium production capacities, the world would still need 1.8 million tonnes on top of that to meet the high case demand.<\/p>

The high case scenario, which encompasses data from Rho Motion on automakers\u2019 passenger EV targets as well as data from the International Energy Agency on enacted country-level policies, would require 5.3 million tonnes of lithium carbonate equivalent (LCE). This is compared to the 915,000 tonnes LCE production in operation today.<\/p>

\u201cIt\u2019s almost impossible, and definitely a race against time,\u201d\u00a0Cameron Perks<\/a>, an analyst at Benchmark, said. \u201cThe big money that needs to be spent takes time to get approval for and to deploy.\u201d<\/p>

Benchmark\u2019s Lithium Forecast<\/a>\u00a0tracks around 400 projects, but Perks is concerned that those with the deepest pockets are not going to rush to invest heavily in even more projects.<\/p>

\u201cThe players with skin in the game are the least likely to rush their spending,\u201d he said. \u201cThey don\u2019t want to flood the market with lithium too quickly. They want to release it slowly to maximise their return.\u201d<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Optimistic automakers invest upstream<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A major driver behind the high case demand scenario are optimistic automaker targets.<\/p>

General Motors and Mercedes-Benz, for example, aim to produce only electric vehicles by 2035 and 2030, respectively.<\/p>

Stellantis aims for 100% of its Chinese vehicles to be electric by 2030. The company is also targeting 50% of all its vehicles in the US and 100% of all its passenger vehicles in Europe to be electric by 2030.<\/p>

Tesla is targeting production of 20 million passenger EVs by 2030. In 2022, the company produced just over 1.3 million EVs.<\/p>

Benchmark\u2019s high case scenario forecasts that 7.0 TWh of batteries will be needed in 2030, compared to 3.9 TWh in the base case scenario.<\/p>

But without large increases in the amount of lithium, these targets will be impossible to hit. With the amount of lithium production forecast by Benchmark for 2030, only 3.2 TWh of lithium ion batteries can be produced, highlighting that the mineral is a constraining factor.<\/p>

\u201cAs a carmaker, consumer, or EV policy maker, should I be alarmed? Yes,\u201d Perks said.<\/p>

In order to meet these ambitious targets,\u00a0automakers are increasingly cutting out the middlemen<\/a>\u00a0and looking to\u00a0secure lithium directly<\/a>.<\/p>

\u00a0<\/div>

In January this year,\u00a0GM announced it would invest $650 million<\/a>\u00a0in\u00a0Lithium Americas<\/a>\u00a0to help the developer progress their Thacker Pass lithium mine in Nevada.<\/p>

Tesla will invest over a billion dollars to build its own lithium hydroxide refinery in Texas which began construction in May this year. Chief executive\u00a0Elon Musk cites lithium chemical production as being the bottleneck for the battery industry<\/a>.<\/p>

Last September CATL, the world\u2019s largest cell producer,\u00a0established<\/a>\u00a0a joint venture with Chinese cathode producer Lopal and lithium producer Tangshan Xinfeng Lithium to build a 30,000 tonne lithium carbonate facility.<\/p>

CATL also acquired Yajiang Sinuowei Mining in March this year, following its bankruptcy. The mining junior has a spodumene exploration permit.<\/p>

BYD, one of the world\u2019s largest cell and EV producers, announced in\u00a0August last year\u00a0<\/a>that it will invest RMB 28.5 billion ($4.2 billion) to build a 30 GWh battery plant and a 100,000 tonne lithium carbonate facility that will process lepidolite.<\/p>

BYD is also developing a 30,000 tonne brine project in Qinghai province as part of a joint venture with Qinghai Salt Lake.<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Policy pushing up penetration rates<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Another major driver for the increased demand of the high-case scenario compared to the base case is primarily driven by ambitious\u00a0governmental policies<\/a>\u00a0that aim to reduce the carbon emissions of the transport sector.<\/p>

The US is targeting a 50% penetration rate of EVs (battery, plug-in hybrid, and fuel cell) in new sales by 2030. The UK will ban the sale of new internal combustion engine vehicles in the same year, with hybrids allowed until 2035. The EU has an ICE ban from 2035.<\/p>

Globally,\u00a0Benchmark\u2019s Lithium ion Battery Database<\/a>\u00a0forecasts that 43.7% of new vehicle sales will be electric by 2030. This drastically increases to 82.5% if OEM targets and current policy targets are met. As a result, demand for lithium ion batteries jumps in 2030 from 3.9 TWh in the base case to 6.1 TWh in the high case.<\/p>

China, one of the largest EV markets, plans to phase out ICE vehicles by 2035.<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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A range of subsidies for EVs will also boost demand. Although the US doesn\u2019t have a binding target for when to have out ICE vehicles by, it does have the Inflation Reduction Act which offers up to $7,500 in tax incentives to purchase EVs that meet certain criteria.<\/p>

The IRA also offers generous tax incentives for the development of domestic lithium and other critical mineral resources.<\/p>

The US\u2019s Department of Energy is also contributing towards the potential $100 billion lithium bill. The department\u2019s Loan Programs Office offered a conditional $700 million loan to Ioneer at the start of this year for its Rhyolite Ridge project which plans to produce lithium carbonate at the mine site in Nevada.<\/p>

This analysis is drawn from the detail in Benchmark\u2019s Lithium Forecast service \u2013 which provides detailed analysis and forecasts for supply, demand, prices and costs out to 2040.<\/strong><\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Source : source.benchmarkminerals.com<\/a><\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

The lithium industry needs to invest $116 billion by 2030 if the world is to meet the ambitions targets set by governments and the largest automakers, according to a Benchmark analysis.<\/p>","protected":false},"author":1,"featured_media":3753,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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Lithium industry needs over $116 billion to meet automaker and policy targets by 2030<\/a><\/blockquote>