Despite Record EV Production Numbers, Shortage of Battery Metals Looms - Seite 3

Down in Australia, lithium giant Albemarle Corporation (NYSE:ALB) threw its weight into a serious bidding war that's heating up for Australia-based Liontown Resources, with a US$3.4 billion bid to takeout the potential competitor in advance of its completion of the Kathleen Valley project, which is expected to go into production in Q2 2024.

Albemarle believes the addition of Liontown and its team would advance its strategy to produce a sustainable, high-quality supply of battery grade materials to support the clean energy transition. The offer comes at a 63% premium to Liontown's closing share price on March 27, 2023. The lithium giant has also announced a new lithium hydroxide Mega-Flex facility in South Carolina, where it plans to invest at least $1.3 billion.

"This facility will help increase the production of U.S.-based lithium resources to fuel the clean energy revolution while bringing us closer to our customers as the supply chain is built out in North America," said Albemarle CEO Kent Masters. "This investment supports our long-term commitment to providing innovative products and solutions that enable a more resilient world."

Having domestic supplies for its battery materials is crucial to US-based EV manufacturers such as Tesla Inc. (NASDAQ:TSLA) (NEO:TLSLA) and Ford Motor Company (NYSE:F).

So much so that Tesla has been rumored to be interested in investing in its own lithium mining company. However, CEO Elon Musk has recently tamped down that speculation stating instead that he sees iron-based batteries becoming more important to the future of EVs. According to Musk, the "limiting factor" is in refining lithium, not actually mining it. Thus Tesla has already broken ground on its own proposed lithium refinery in Corpus Christi, TX, with the goal of starting output within a year.

Despite losing $2.1 billion selling EVs in 2022, Ford Motor Company (NYSE:F) is doing its part to bring its costs down, starting with opening a lithium-iron-phosphate battery plant in Michigan that could bring the high costs of EVs down. Using a second battery type lets Ford boost production of EVs quicker, and lowers the cost of batteries thus making EVs more affordable to more buyers, according to Lisa Drake, VP of EV industrialization for Ford Model E, its EV unit.