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LITHIUM PRICING BOOM RAISES QUESTIONS ABOUT THE EV FUTURE

Could eFuels Be The Move Forward Instead?

2021 2022 2023 Ford F-150 Electric Vehicle EV
Image Via Ford.

Electric vehicles are going to quickly become a more common commodity here in the United States and abroad. As automakers try to deal with the rapidly tightening restrictions put in place by governments across the globe, these battery-powered machines seem to be the quickest and least-painful option for companies like General Motors, Ford, and VW among others. That said, there are some real challenges that lay ahead, ones that simply can’t be fixed by just abandoning ICE-powered vehicles. There are growing concerns related to the physical supply of materials needed to create the batteries that power EVs, specifically lithium and cobalt. And with lithium prices skyrocketing in 2021, this raises more concerns about the EV price parity discussion.

As automakers across the globe make verbal commitments related to the transition to electric vehicles, the projected demand for lithium has hit an all time high. In fact, the price of lithium has jumped 71.24 percent since December 1, 2020. According to a report from Yahoo Finance, this has triggered a massive disruption within the global energy market. With the demand for EVs expected to rise at a 21.1 percent Compound Annual Growth Rate until 2026, this problem is only going to get worse.

Combine this with the fact that major tech companies like Apple, Google, and Microsoft also all need immense supplies of lithium for their products, and the issues become more clear.

General Motors Ultium Lithium Ion Battery Pack designed by LG Chem.
GM’s Ultium Battery Pack supplied by LG Chem. Image Via GM.

For years electric vehicle supporters have pointed to the “inevitable” fall of lithium ion battery prices. They have long claimed that this process will help make electric vehicles equally as affordable as their gasoline-powered counterparts. And when you consider that the battery is far and away the most expensive part of an electric vehicle, this might make sense on the surface. However, we have already explained why this argument completely ignores the basic principles of business. Automakers aren’t here to pass on their savings to the consumer. They never have, and they aren’t going to start in the era of multi-billion investments into EVs. That said, the spiking prices of lithium makes one wonder if electric vehicles are about to become even more expensive than they already are? That is how supply-and-demand based economics tend to work, anyway.

So then if the price of lithium continues to skyrocket, and we already know there aren’t really enough metals out there for all of these new batteries, what do we do? Well it turns out everyone’s favorite sports car maker from Stuttgart is onto something.

According to RoadShow, Porsche has been working on something that they call E Fuel, which is a synthetic fuel made for use in internal combustion engines. The automaker claims that this E Fuel offers nearly identical emissions to that of an electric vehicle, when you take a holistic view of production and use into mind. Overall, Porsche says the fuel offers a reduction in CO2 emissions by over 85 percent compared to traditional gas.

992-Generation Porsche 911 GT3
Image Via Porsche.

The synthetic fuel is created with some help from Exxon Mobil and their proprietary methanol-to-gasoline process. It starts by splitting water in hydrogen and oxygen, before CO2 is removed from the air and is combined with the hydrogen to create methanol. From there, the secret part happens, and then we are left with E Fuel.

Of course lithium prices and supply aren’t the only challenges wide-scale EV adoption is going to face. There needs to be massive infrastructure changes across the globe in order for these vehicles to become as practical as our cars today. This will involve tearing up roadways to run high-voltage electric lines, upgrading our grid architecture, and a total overhaul of the “gas station” model. Add the mining and shipping of materials into that, and you’re talking about a massive amount of carbon emissions being generated before any miles are driven.

So then, maybe Porsche is going to actually save us all? Only time is going to tell.

Rising Lithium Prices are raising questions about widespread electric vehicle adoption. Could Porsche's new E Fuel change our view on EVs?
Image Via Porsche

Written by Lucas Allen

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