No Battery Shortage Forecast For EV Production

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In recent months, both Audi and Tesla have blamed production delays for their electric cars on a shortage of lithium-ion batteries. A new report from Bloomberg suggests this might be the last time the market is short of lithium, with prices likely to fall.

  • Australia and Chile, the world’s leader in lithium production, will increase capacity.
  • Slowing demand in China, the number one EV market, will lead to a further surplus.
  • Cheaper lithium will place higher demands on battery-cell producers, which they may not be prepared for.

One of the arguments used by opponents of electric vehicles is that lithium is too scarce and too expensive. But the cost of lithium is about to be slashed as its scarcity is diminished.

Australia, already the world’s largest producer of lithium, aims to boost production. (Photo: Pexels)

Since 2017, Australia, the number one producer of lithium in the world, has opened six new mines and has plans to increase lithium ore production by as much as 23% over the next two years. The number two producer, Chile, is looking to double its production over the next four years. And with the Chinese EV market slowing — a 50% drop in growth in 2018 compared to 2017 and another drop in the first quarter of 2019 — demand is also falling.

While you might think this guarantees cheap and plentiful batteries for the growing number of EVs coming from just about every manufacturer, it may not be that simple. Manufacturers who turn lithium into actual battery cells are still in the process of completing new production facilities.

Chinese battery cell manufacturer, Contemporary Amperex Technology (CATL), is on track to produce more battery capacity than all current manufacturers combined, but that isn’t until 2022. Several other manufacturers have similar goals, but their timelines are even further out. And some manufacturers are playing their cards even closer to the vest, hinting that new facilities might be waiting on a next generation battery technology altogether.


Cheaper and more plentiful batteries could be the best thing that could happen to the electric vehicle market. The battery is still the most expensive single component of an EV, so bringing that price down will either drastically lower the price of the car, or maybe even better, allow manufacturers to install higher-capacity, longer-range batteries.

But the downside to cheap anything is a lack of motivation for innovation. Lower-priced electric cars will certainly cause increased adoption rates, but for EVs to become true replacements for gasoline powered vehicles, a next generation battery alternative needs to be pushed into the market, one that can offer both massive ranges and quicker charging times.

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