RE: Not Gunna Be Enough Lithium3 Dec 2019 02:03
"We don't have the expertise to invest in a mine," Renault Nissan Mitsubishi head of strategic environmental planning Catherine Girard told a mining investment conference in London last week.
"Direct investment? No. But that doesn't mean we don't want to secure our resources. It is our ambition to be a key part of the EV revolution, and we are always talking to new stakeholders to develop that business."
Renault Nissan Mitsubishi sold 400,000 Nissan Leaf all-electric cars up to March 2019. The companies sold 10 million vehicles of all types in 2018.
However, the lack of direct investment in mining by any of the major car companies - despite enormous plans for EV production from Volkswagen, BMW and others - prompted Will Smith, chief investment officer at Westbeck Capital Management, to express concerns about the discrepancy.
"We're going to find this is a problem. At the moment none of the battery manufacturers are concerned about sourcing materials. I think they're complacent," he said.
"We are going to need a lot more battery metals in three to four years. Right now we've got oversupply. There will also be a quality problem as well. If you can produce the highest grade you're going to be fine. But we've seen time and again new producers have real difficulty satisfying consumer demand," he said.
Smith pointed to producers in South America, which had struggled to produce battery grade material and had in some cases resorted to shipping low grade material to clear off their production stockpile.
Other industry participants expressed concern about the dangers of sourcing battery materials from outside Europe, given increasing concerns about political expropriation, child labour and environmental issues.
"We need more investment," said Ana Berenguel-Anter, senior banker and associate director, natural resources at EBRD. "We are talking millions of EVs. Where is the supply coming from? Developing countries with resource nationalism? Is there corruption and modern slavery in the supply chain? It's impossible to know, and consumers want answers."
However, there is relatively little time for any teething troubles to be worked out. In the UK, the carbon emissions produced by vehicles will need to reach 67g per km travelled by 2030, according to Jacqui Murray, deputy director at the Faraday Battery Challenge, part of the state-funded Industrial Strategy Challenge Fund in the UK. The average as of November 2019 is around 110g/km.
"We are sitting on a cliff edge," she said. "The internal combustion engine is reaching the limits of efficiency, and even hybrids aren't going to get us down to 60g/km by 2030."
Murray pointed to investments made by Jaguar and Land Rover into converting factories to produce electric vehicles.
"A conservative forecast is for eight gigafactories in Europe by 2040 just to supply the automotive sector, and that's before rail transport or consumer activity are considered," she said.
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