If car manufacturers want to survive they have to become mining companies. Stellantis knows it well

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The future of the automotive sector goes through… mining. With manufacturers in full transition, between combustion and electric vehicles, and Brussels determined to finalize the marketing of gasoline and diesel cars already in 2035the big companies are finding themselves with a serious problem that they need to solve: we don’t have enough lithium to make batteries.

More is needed. Much more. It’s not a surprise or anything that the industry hasn’t been sniffing around for years; but as time progresses and the deadlines set by the EU or self-imposed by corporations approach, desperate measures gain weight. The one that is gaining the most strength: that the vehicle manufacturers put on their helmets, take their pickaxes and go down to the mines for lithium.

It sounds crazy, but there are already those who are doing it.

The last to set an example, Stellantis. The last example is left by Stellantis. The European firm has disbursed about 50 million euros to become the second largest shareholder in Vulcan Energy, a company of Australian and German origin that plans to exploit the lithium reserves of the Upper Rhine Valley. In addition to acquiring 8% stake in the company, Stellantis expands the supply agreement for the precious metal, essential for the manufacture of batteries.

“Making this strategic investment in a leading lithium mining company will help us create a resilient and sustainable value chain for our European production,” highlights the CEO of the groupCarlos Tavares. If it wants to meet its goal of focusing on electric vehicles by the end of this decade or the beginning of the next, Stellantis will need to produce 150 GWh of batteries by 2030. In fact, it already plans open factories for batteries throughout the next few years.

A step as striking as it is unsurprising. That’s right, the fact that a car manufacturer gets involved in lithium mining may be surprising, but it is hardly surprising or unexpected. Stellantis is not the first step in that direction. What’s more, at the end of 2021 themselves they had already announced an agreement with Vulcan Energy to ensure the supply of between 81,000 and 99,000 tons of lithium hydroxide until 2026. With their new movement they go a little further.

Another electric automotive giant, Tesla, is also considering becoming self-sufficient in lithium to ensure that it will not lack the valuable material. In 2020 Elon Musk already announced that the company had acquired a 4,050-hectare plot of land in Nevada to extract metals and build a lithium refinery, in 2021 patented a selection system and just a few months ago I had the same idea via Twitter: If the prices do not drop, Tesla will dedicate itself to mining it directly.

And they’re not the only ones. Of course not. Neither Stellantis nor Tesla are rare, nor is their fear of lithium shortages and rising prices an eccentricity. end of 2021 Volkswagen made a move also to be one of the priority buyers of Vulcan Energy until 2026, General Motors has invested to achieve lithium in California and BMW has done something similar in Argentina.

The concern is not new. In 2018, another of the giants in the sector and with a clear commitment to hydrogen engines, Toyota, invested around 190 million euros to gain a prominent stake in a mining firm specializing in the extraction of… Exactly, lithium.

There is so little lithium that electric car brands are already considering mining or importing it themselves

The objective: secure supply… and without intermediaries. The objective of the industry is clear: to guarantee the supply of lithium and to do so by dispensing with intermediaries. They have reasons to want it. As Musk himself lamented in February, the price of lithium has skyrocketed over the last few years, drifting upward with tremendously steep increases. Who wanted to buy lithium last January had to pay five times more than in the same month of 2021.

As the adoption of electric vehicles increases both in Europe and globally, their demand is likely to grow and the opening of new mines is not always a simple and fast process. We have a good example in the misgivings it arouses the project to exploit a deposit in Extremadura due to the environmental impact. Your weight in Europe would be key.

And as a background, supply problems. As a background, the automotive sector is also facing the problems of metal supply and the so-called rare earthscritical minerals of great value for the manufacture of electric vehicles.

The EU itself has recognized that in 2030 it will need up to 18 times more lithium and five times more cobalt than we have in current supply; the need will be even greater by mid-century. Added to this need are key handicaps: dependency on the EU, which needs to import materials such as cobalt, lio or rare earths from Africa or Asia; in addition to its high cost.

Cover image | Coordenação-Geral de Observação da Terra/INPE (Flickr)

The future of the automotive sector goes through… mining. With manufacturers in full transition, between combustion and electric vehicles, and…

The future of the automotive sector goes through… mining. With manufacturers in full transition, between combustion and electric vehicles, and…

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