There’s a mad rush to build more EV plants, but where are the minerals? – Mish Talk

The auto industry has committed billions of dollars to EV projects, resulting in the largest auto plant construction boom in decades.

The U.S. auto industry is entering one of its biggest factory construction booms in recent years, a cost increase fueled largely by a shift to electric vehicles and new federal subsidies aimed at boosting U.S. battery production.

The 11-month total adds up to $37 billion in new auto plant spending in 2021, when several new projects have been revealed in states like Tennessee, Kentucky and Michigan. The center said the annual figure was up from $9 billion in 2017 and more than eight times more than two decades ago.

Automakers’ race to fill their lineups with electric vehicles is the biggest driver behind factory spending. The federal climate package was adopted in 2022 It will further accelerate US investment by providing tens of billions of dollars to subsidize EV and battery factory projects, as well as facilities for the processing of battery materials such as lithium and graphite.

Some foreign auto companies are targeting the US for expansion, compensating for weakness in other global markets. Meanwhile, newly capitalized EV startups including Rivian Automotive Inc. are developing manufacturing capabilities.

Rivian, which started car production in Illinois in 2021, has committed to opening a second factory in Georgia in 2026. Hyundai Motor Co. also announced plans to build a $5.5 billion factory complex in the state.

The Inflation Reduction Act further accelerated efforts to increase domestic production. It offers billions of dollars in manufacturer incentives for domestic battery production and limits the federal tax credit for EV buyers to vehicles with batteries and their mineral components from North America or trade-friendly countries.

Last year, General Motors Co. opened a new battery plant with LG Energy Solutions in Ohio and is developing two more plants in Tennessee and Michigan.

Panasonic Holdings Corp. said this summer it will build a $4 billion battery factory in De Soto, Kan. Ford, Toyota Motor Corp and Jeep owner Stellantis NV also have multibillion-dollar battery plant projects underway.

Thoughts on the Inflation Reduction Act

If you hand out enough free money and incentives, you can push almost anything to get built.

If people are reluctant to buy cars, we need more free money to entice them to do so.

When complaints come in, refill units are not enough, we need to give more free money.

Where we get the lithium, nickel, cobalt, manganese and graphite to make all the batteries for electric cars remains a mystery.

What about recycling?

The growing number of EV batteries expected to reach end-of-life (EOL) represents both opportunities and challenges. Domestically, 200,000 metric tons of EV batteries are expected to reach EOL by 2027, or 800,000 metric tons globally that year.

Even if technologies exist that can extract minerals from recycled batteries, only those that are economically viable will be used. The economic viability of battery mineral recycling can be affected by the design of the battery pack: if the pack is difficult (ie, expensive) to disassemble, disassemble or recycle, or if disassembling the pack creates an expensive waste stream, the overall costs of recycling can be high. exceeds the expected returns from the process and makes the overall process uneconomical. Alternatively, a battery pack optimized for recycling may be too expensive to compete with other designs.

The above excerpts are from the 2022 Congressional Research Paper Critical Minerals in Electric Vehicle Batteries

I can suggest that very little consideration will be given to recycling as all efforts will be on getting more miles per charge.

What about mining?

Indonesia is the world’s largest producer of nickel, but the process of extracting the metal consumes large amounts of energy and involves controversial waste disposal practices, including dumping waste into waterways.

The disturbing fact above is from Convenience.Org. Here are more inconvenient facts.

While EV batteries can last up to 10 years or about 150,000 miles before needing to be replaced, battery manufacturers are struggling to supply these large power packs, particularly the key components of cobalt and lithium.

Demand for cobalt and nickel could exceed production in less than a decade, according to several studies. Cobalt has the most supply risk because of its highly concentrated production and limited reserves. There are not many cobalt producers with a single company producing one-third of the world’s annual supply and one country supplying 65% of cobalt.

In the US alone, the amount of lithium, cobalt and battery-grade nickel needed to electrify every light truck on the road exceeded the total amount of these resources produced globally in 2019, according to a report on supply chain vulnerabilities.

It is difficult and expensive to extract the minerals from electric batteries for recycling, breaking down the batteries and then breaking them down with heat or chemicals in special facilities. Moreover, transporting a battery to a recycling facility is expensive, with transportation accounting for about 40% of the total cost of recycling, because EV battery packs are so large that they must be transported by truck, often over long distances, in specially designed cases.

Often the cost of battery recycling exceeds the cost of purchasing a new battery. Currently, the only battery material that can be recycled profitably is cobalt, because it is rare and expensive..

Brookings also warns that Indonesia’s electric car batteries have a dirty nickel problem

Nickel is a key part of Indonesia’s commodity-based development strategy, which bans the export of raw materials to attract the country’s downstream investment and catalyze socio-economic development. The government plans to impose a tax on exports of nickel pig iron (NPI) and ferronickel, which is likely to increase production of battery-grade nickel. Indonesia has become a key supplier over the past year for EV makers struggling to source nickel in a tight market.

But there’s a catch: Indonesia’s nickel sector is particularly carbon intensive and environmentally damaging. This poses an awkward challenge for EV manufacturers, who are under pressure to manage environmental, social and governance (ESG) issues in their supply chains, including carbon emissions. Some EV manufacturers have opted for “low carbon” nickel. However, supply of “low carbon” is insufficient to meet projected demand and comes with a higher price tag.

Indonesia’s nickel sector poses many environmental problems. Its nickel refining industry is particularly carbon intensive because it depends on coal.

Where is the cobalt?

Swipe to Continue

NS Energy reports that the Democratic Republic of Congo has half of the world’s cobalt reserves.

Congo plans to set up a state-backed company that will own the rights to all of the country’s artisanal cobalt in a bid to exercise greater control over revenues from the DRC’s precious national resource.

Don’t worry, I’m sure if we drop enough bombs, the Congo will share fairly.

Besides, we can always turn to Russia, the world’s second largest supplier, according to the Tweet below.

All in Australia, #3 supplier. NS Energy was 2nd Australia and 3rd was Cuba.

Where are these minerals produced and processed?

Questions of the day

Has anyone in the administration seriously considered any of these issues?
How many CO₂ and pollution caused by the extraction, processing and transportation of these minerals versus natural gas?
How much inflation can be expected from this?

Bonus question

Assume that everyone in Florida buys an EV in the next 5 years. Please tell us how we handle mass evacuations when the next big hurricane hits.

About 6.8 million people were evacuated in Florida during Hurricane Irma.

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