Elon Musk’s determination to cover all bases in E-Mobility industry continues. With another trip to Chile on Wednesday, Musk has again fuelled speculation of his plans to tackle another major hurdle in the electric world... building a stable foundation for ethical, affordable and efficient battery production. Too truly elevate Electric Vehicles into the mass market I think we can all agree that, there must be a sustainable supply of the natural minerals and resources required to produce batteries on a mass level.
You can see the current problem…
PRICE OF AN ELECTRIC CAR POWERTRAIN: $16,000
PRICE OF A CONVENTIONAL CAR POWERTRAIN: $6,000
Furthermore, shortages in minerals such as Cobalt, Lithium and Graphite make prices high and electric vehicles unaffordable. In our current economy, the mass market will bypass the benefits of owning an electric vehicle if the cost is simply not competitive. I have no doubt that Electric Cars will go mainstream however that will only be achieved when the cost of the powertrain, the motor and all the other guts that make the vehicle move, is the same or similar cost as owning cars that burn gasoline or diesel. How soon does this day arrive? Well, that is solely a function of the price of the batteries. Shortages and no tangible mineral plan have led to a sharp increase in mineral prices… this is not sustainable for the industry.
PRICE OF COBALT: Up 115 percent
PRICE OF LITHIUM: Up 45 percent
PRICE OF GRAPHITE: Up 30 percent
As the industry has inevitably grown we have seen battery prices fall, however, this is only due to numerous manufacturers ramping up production of EV’s over the past years (the greater the supply, the lower the price). The problem here is that (at this present time) the mineral supply chain is nowhere near the level required for a future of mass market Electric Vehicles. Elon Musk is in Chile to develop a solution to this growing problem. The search for Lithium is well and truly on, and there is a high risk that a few select (mineral rich) countries could control most of the ingredients for electric car batteries. This has sparked an influx of old mines re-opening for the new mobility revolution, a fine example being the Cinovec project in the Krusne Hore Mountains, Czech Republic. Accessible and highly purified lithium is the new gold.
Why Tesla? More and more car companies are getting into the battery supply chain business as it makes more sense for the companies to earn the battery profits themselves rather than pay them to a supplier like Samsung or Panasonic. There have already been a few suggested solutions for the car companies with rumors of building Giga Factories on top of lithium deposits… Raw products in and batteries out the other end like a machine gun. Seems bulletproof right? WRONG! the problem here is that lithium is usually found in very remote and harsh terrains. Chile, for example, has extremely thin air and an unnecessary amount of sunlight. Companies will not invest £5 Billion in a high-tech factory in such a remote area and expect to hire 10,000 very highly skilled people to operate it and essentially live in the middle of nowhere, not being able to breathe and probably sunburnt. We here at Hyperion Executive Search class ourselves as very established and talented headhunters, but persuading a highly skilled professional to move from his home to a remote mountain in Chile would prove to be a little difficult, even for us! However, in theory, a massive lithium carbonate mining and purification factory are possible. Companies could then look to ship highly purified lithium carbonate out to Giga factories across the world. Therefore, I believe that Musk is in Chile to evaluate and hopefully negotiate long-term partnerships with local lithium miners and create an efficient lithium supply chain to lay the foundations for a mass-market electric vehicle future.
We here at Hyperion Executive Search stay at the cutting edge of technical understanding within the industry, aiming to expand our knowledge to remain at the forefront of the sector. We are working directly with market leaders in battery technology and energy storage in the UK and across Europe. We feel a genuine responsibility to ensure that we find the best people for the best companies for ultimately the best possible future of energy generation and efficiency. Even if the role is in the Chile Mountains. We’re here to build long-term mutually beneficial relationships with companies of the future and our passion for clean energy is central to everything we do.
Chile is believed to have one of the largest and most accessible reserves of lithium in the world and several mining companies are currently rushing to exploit those resources.