The United States has large reserves of lithium, but not enough processing and refining infrastructure to turn into useful material for EV batteries, according to a recent CNBC report.
The U.S. holds almost eight million metric tons of lithium in reserve, ranking it among the top five countries in the world, but only 1% of global lithium is currently sourced from the U.S., the report said.
More than 80% of the global lithium is currently sourced from Australia, Chile, and China, with the latter nation controlling more than half of the world's lithium processing and refining capacity.
Extracting Lithium Carbonate From Brine
The U.S. once had more lithium refining infrastructure, but lost it. It was the leader of global lithium production until the 1990s; that came to an end due to cost issues, the report said.
Lithium mining in the U.S. generally involves extracting the metal from rocks, which is more costly than the brine-evaporation process used in countries like Chile. And China needed to ramp up lithium processing earlier than the U.S. to meet demand for electronics manufacturing and increased EV production, in line with government mandates.
Now the U.S. is left with a surge in demand for EVs batteries, but without the infrastructure to supply lithium. That leaves the prospect of importing refined lithium from China which, ad CNBC notes, could create a modern-day version of the oil question that troubled national-security policymakers throughout the Cold War and into the 2000s.
2022 Mercedes-Benz EQS production at plant in Sindelfingen, Germany
In June 2021, the Biden Administration issued a National Blueprint for Lithium Batteries to address the supply issue. It called for increased domestic processing of raw materials, as well as more manufacturing infrastructure for battery cells and packs, and recycling infrastructure. This could also benefit the global market, lowering battery prices and alleviating concerns of battery-manufacturing bottlenecks as automakers go electric.
However, right now there is only one operating U.S. lithium mine, in Silver Peak, Nevada. Plans to open additional mines have been discussed, but they face opposition from environmentalists and local residents.
It's not just lithium, either. Battery makers have experienced shortages of other materials in recent years. Tight supplies of nickel are yet another supply issue that might slow (or briefly, reverse) the longtime drop in cost of EV batteries, according to a 2021 report.