There’s something extremely misleading about the name “lithium battery.”
We know why lithium gets all the credit: the chemistry that makes these batteries so powerful wouldn’t work half as well without this unique metal.
Even other older rechargeable battery designs are limited in ways lithium batteries just aren’t!
What many people don’t realize, however, is that lithium really only makes up a tiny part of the battery itself.
Still, lithium-based batteries represent one of the fastest-growing segments of the energy industry today.
The only thing holding the technology back now is price.
And the biggest cost may not be what you think..
A Load of Lithium
In the past few years alone, lithium prices have shot skyward almost without pause.
Much of this growth is due to the increased use of lithium batteries in consumer electronics, large-scale energy storage projects, and electric vehicles.
Tesla’s Model 3 has finally hit the pavement, and the company intends to start ramping up production at its Gigafactory immediately. This factory is only the first planned of many all over the world, and it alone is expected to consume nearly all of the world’s current lithium production.
It will take a while for supply to catch up with increasing demand, which means lithium’s rise isn’t slated to slow any time soon.
However, climbing lithium prices aren’t really what’s keeping lithium batteries so expensive.
The titular metal makes up less than 5% of an average li-ion battery by volume.
It’s an essential, but ultimately minute part of the lithium battery design.
In fact, according to research published by Carnegie Mellon University, even if lithium were made completely free today, the price to produce the battery would only fall by about 3%.
What’s more, lithium is not rare.
Finding enough to cover fast-growing demand is just a matter of getting new projects in Argentina, Bolivia, and Australia off the ground.
That will take a few years, for sure, which is why we’re still riding the lithium bull today. But the market will inevitably balance out, and all lithium investors today should be prepared for this eventuality.
Meanwhile, another lesser-known battery metal is facing an even bigger challenge.
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