Waging a War for EV Materials Security

Electrification is forcing the auto industry to swap its Mideast oil addiction for a heavy dependence on lithium.

July 1, 2021

Lindsay Brooke

A lithium extraction mine in northwestern Argentina viewed from NASA’s EO-1 satellite. (Jesse Allen/NASA)

Conflict over natural resources and human history are inseparable. Wars waged directly or indirectly over control of commodities, trade routes, water, food sources and arable soil have been the root cause of much of the death and misery on planet Earth.

As a student in the 1970s, the politics of petroleum loomed large for me. The OPEC cartel dominated global oil production, fixed prices, and caused gas lines and brownouts via embargos. It was an era when the term “gas guzzler” defined a hefty chunk of the North American car parc. As time went on, dependence on imported oil was a foregone conclusion and an oil war seemed inevitable. That security threat became real in summer 1990, of course, when Saddam Hussein invaded Kuwait.

It was thus a revelation 20 years later, when the U.S. energy situation flipped upside down. An emergent shale oil industry ultimately helped make the U.S. a net exporter of all oil products including crude. Energy independence, an oft-cited goal of American legislators, was actually achieved. Timing for “peak oil” was pushed back again by the International Energy Agency (IEA).

But the global energy wheels continue to spin in unexpected directions. Electrification, the new disruptor, is forcing the auto industry to swap its Mideast oil addiction for a heavy dependence on lithium. The world’s appetite for lithium batteries will be insatiable as EV sales grow, experts maintain. According to the IEA, meeting the Paris Climate Agreement’s goals will require 42 times as much lithium as was mined in 2020. Existing mines and projects under construction will meet only half the demand for lithium in 2030, the agency forecasts.

Most lithium is sourced from open-pit mines or brine pools in Australia, Chile and Argentina (top). The U.S. currently has only one active lithium mine but there are efforts to reopen mothballed sites in Nevada and North Carolina. Other locations in North America are being investigated. Investors are energized; the Dept. of Energy is engaged, and the predominant vehicle OEMs are looking for the right supply partners.

Aiming for greater materials security, General Motors announced July 2 that it plans to source a “significant portion” of its battery-grade lithium in the U.S., from Controlled Thermal Resources (CTR), a California-based startup that GM has invested in. CTR also aims to use what it claims are environmentally sound practices to extract lithium in its southern California lithium operation.

All of this is cause for cautious optimism. Automakers must not allow the two most critical materials used in EVs – lithium and the rare-earth metals essential for permanent-magnet electric motors – to fall under OPEC-like domination by a single state. This is, in my view, the key strategic issue of the nascent EV era.

For consideration: More than two-thirds of lithium-ion batteries come from China, as do most of the rare-earth minerals. One of them, neodymium, is used in e-motor magnets. It’s also used in weapons systems. In 2010, China halted the export of rare earths to Japan for two months following a territorial dispute over the Senkaku Islands. Prices skyrocketed.

The world should expect similar attempts to intimidate in the future, as geopolitics and the battle for the strategic “guts” of vehicle electrification heat up. True energy security demands more innovation in the machine – and far more diversity in supply of its key materials.