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If This Battery War Is Successful, Electric Vehicle Prices Should Fall
The plot by recyclers to take down the commodities industry
The next big thing in electric vehicles is bringing down their price to the reach of the ordinary wallet. But of all the ways of accomplishing this, a vastly underappreciated method would be to attack the biggest source of high EV prices: the cost of the metals that go into a lithium-ion battery. Now, Elon Musk’s former top lieutenant is helping to lead exactly that — a nascent siege of the cozy commodities industry.
In the middle-late 2000s, Steve Jobs and Musk excited a generation of people and gave heartburn to their competitors with two hyperdesigned technologies: the sleek smartphone and the cool EV. But before they could do so, both required a wholly separate advance: a breakout battery that would replace heavier, relatively weak cells and keep improving.
A dozen years later, massively more powerful lithium-ion batteries are responsible for ubiquitous portable electronics that have transformed daily life just as the washing machine, refrigerator, and vacuum cleaner did a century ago.
Batteries make up about a third of the price of an electric car, and at least half the battery’s cost is tied up in the metals inside.
But now, lithium-ion batteries and the technologies they have enabled face a reckoning: a forecast fourfold surge in the sale of EVs in the next five years, to 8.5 million a year, and another tripling by 2030, to 26 million annually. If the numbers are correct, all those EVs — on top of smartphone and laptop demand — are going to require a lot more raw materials. Cobalt demand will rise sixfold by 2030, nickel fivefold, and lithium ninefold, according to Simon Moores, managing director of Benchmark Minerals Intelligence.
That could create dual crises: Batteries make up about a third of the price of an electric car, and at least half the battery’s cost is tied up in the metals inside. This core fact — the vulnerability of EVs and batteries to the vicissitudes of the commodities market — seems bound to play even more havoc if metals prices spike because of far higher demand. The…
