April 20, 2022—The automotive industry is facing the beginning of an electric vehicle battery shortage that will not be subsiding any time soon, according to an article by Morning Brew.
In the last year, the price of lithium has increased 480 percent, according to data provided by Benchmark Mineral Intelligence in the article.
This is important because 80 percent of the cost of a lithium-ion battery comes directly from the raw materials used to produce it, including lithium, cobalt, and nickel. The amount of companies demanding these supplies is what plays a role in surging costs.
Lithium-ion batteries actually account for around 30 percent of the cost of an EV. So, along with higher battery prices inevitable comes higher prices for customers to pay.
"In 2020, the US imported over half of its supply of 46 minerals and all its supply of 17, according to the US Geological Survey," the article says. "One of the biggest suppliers is China—the world leader in lithium-ion battery manufacturing—which has a history of restricting trade for political reasons."
Domestic mining and battery production is not something that can pop up overnight. In fact, it could take years to see significant progress made in that respect.
This means that, in order for manufacturers to reach President Biden's proposed goal of making half of all new cars sold by 2030 electric, electric vehicle production will still be subject to imported goods and all of the supply chain issues that go along with them.
