It goes without saying that the global electric vehicle (EV) industry is thriving. Sales doubled in 2021 to 6.4 million units sold, and the market is projected
to reach a value of $802.81 billion by 2027. But one major manufacturing component may slow down the growth of EVs—lithium. The silvery-white alkali metal lithium is as essential to the EV sector as water is to life. EV batteries cannot function without this metal.
Thanks in part to COVID-19 lockdowns in China that impacted global supply chains, lithium demand is increasing, prices are skyrocketing, and supply is tight. Costs have increased more than five-fold in the past year, threatening top auto manufacturers in the EV market.
Jerry
, the insurance super app
, is breaking down how a lithium shortage may impact the market and how one company is hoping to stand out in the lithium production industry.Compare insurance quotes from 50+ carriers with Jerry in under 45 seconds
Compare insurance quotes from 50+ carriers with Jerry in under 45 seconds
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ drivers Lack of lithium shorting EV growth
The world's largest electric vehicle manufacturers are currently racing to acquire lithium supply contracts and vital raw materials.
But even with contracts and agreements in place, supplies are constrained and demand is rising as more companies try their hand at EV production.
Although lithium is a plentiful resource on Earth, it's useless when buried deep underground. And unfortunately, the rate of extraction and refinement can't keep up with the increasing demand.
Global lithium demand is estimated to exceed 2 million metric tons of lithium carbonate equivalent (LCE) by 2030—more than double the demand expected in 2025. When major EV manufacturers like Tata Motors, Ford
, and Rivian are left waiting to secure lithium supplies, the trickle-down consequences are substantial. Potential customers looking to purchase a new vehicle in short order may be turned off and revert to gas and diesel cars. And lost business means lower annual revenues and share prices for EV titans.
But governments, countries, organizations, and individuals are so committed to the EV transition that they're intent on improving supply chain management.
High hopes to spark change in the industry
Arena Minerals
, a new developer based in Argentina, is one company on a quest to get high-quality lithium products into the hands of key market participants. And their lithium brine processing technique is gaining traction and getting them noticed.Lithium brine deposits are formed by salty groundwater that has been enriched with dissolved lithium. The deposits are only found in a few places in the world—most typically in Chile and Argentina.
Arena Minerals' initiatives provide a strategic edge. Its methods are unique, economical, and less high-risk than other conventional techniques, helping Arena to reach its end goal of creating a salable technical-grade lithium chloride.
Two noteworthy investors in Arena Minerals are Lithium Americas Corp. and Ganfeng Lithium Co. Ltd., the latter of which is the world's largest manufacturer of battery-grade lithium. Not to mention, Ganfeng has a lucrative lithium supply arrangement with Tesla
. Maintaining your electric vehicle's insurance
Even with a lithium shortage looming over the industry, electric vehicles are only becoming more common. Whether you own one now or plan on purchasing one in the future, offsetting some of the costlier parts of car ownership can make a big difference in the long run.
If you’re looking to cut your car insurance
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