Since EVs seek to replace vehicles powered by oil products, there is a problematic tendency to discuss EVs in terms of the oil paradigm. For example, the media raises questions about “lithium dependence” instead of “oil dependence,” “peak lithium” instead of “peak oil,” and has even referred to Bolivia as the “Saudi Arabia of Lithium.”
We can understand the tendency to draw an analogy between lithium and oil: they’re both finite natural resources found in concentrated deposits, and they both can be processed and used to power electric cars. However, beyond these superficial similarities, the analogy is running on empty.
Oil is a non-renewable resource that can release energy through a combustion engine. When it burns to power a car, it’s gone forever. Lithium, on the other hand, is integrated into an energy storage device. It doesn’t inherently contain energy – it just holds it until you need it. When a lithium-ion battery discharges energy to power a electric car, it is the stored energy – not the lithium – that is depleted.
Lithium is a recyclable metal just like gold or platinum. There are only about 7 lbs of lithium in a 24 kWh battery pack that can power a car about 100 miles per full charge. After 2,000 full charge cycles, the battery will be considered at “end of life,” which means that its energy capacity (or maximum range) has been reduced by 20%. At this point, the battery can begin a new life in a different use (e.g., in stationary grid applications that can store solar or wind energy), or recycled to integrate virtually all of the lithium back into a new battery pack.
A U.S. Department of Energy lab has modeled lithium supply and demand out to 2050, and here is what they found: lithium supply will continue to be abundant, especially if recycling infrastructure is expanded. Current lithium production represents a tiny fraction of known reserves (in both brine and pegmatite) distributed around the world, including China, North America, Australia and Europe. Even with upper-bound estimates for EV penetration, demand for virgin lithium materials will peak around 2035 (though within supply constraints). After 2035, demand for virgin lithium materials will decline since overall demand will be met by supplies brought online through increased recycling.
Even if commodity prices increase significantly, lithium accounts for only 3% of the price of a lithium-ion battery and hardly introduces a risk of upward pressure on overall battery cost.
The geopolitical concern is also a non-issue. While Bolivia does have the world’s largest known reserves of lithium, it has no commercial lithium operations. The Electrification Coalition has questioned the economics of starting such operations in Bolivia due to disadvantageous salt ratios, weather, altitude, transport problems and lack of mining infrastructure, which should allay concerns of becoming dependent on the country’s lithium in the future. Another overlooked fact is that Chile and Argentina – both active lithium exporters – together have about the same lithium reserve base as Bolivia.
To sum up, experts agree that lithium is abundant even if Bolivia’s reserves never come online, and the recyclability of this natural element will ensure that supply will continue to keep up with demand for decades if not centuries to come.