Op-ed by Brent Wilson, CEO of Galvanic Energy.
The war over global dominance of the electric vehicle battery industry seems like it ended before it really got started. China is walking away as the winner and the US might as well wave the white flag because it may never catch up.
Those are the conclusions of Hong Kong-based Gavekal Research. As reported by Barron’s last month, the firm released an analysis of China’s stranglehold on the industry that supplies lithium-ion batteries for millions of electric vehicles around the world.
“It (China) refines 60% of the world’s lithium, controls 77% of global battery cell capacity and 60% of the world’s battery component manufacturing,” the market research firm wrote. “Of 200 battery mega-factories in the pipeline to 2030, 148 are in China.”
The report also suggests that Tesla, the world’s top EV manufacturer, is irrevocably dependent on China for its EV battery supplies, and countries such as Brazil and Argentina have shunned the US because of trade policies imposed by the Trump administration.
Well then. The game must be over if Brazil and Argentina have jumped ship.
The fact is, those who dismiss or underestimate the United States are usually disappointed in the end. Today’s global energy transition will be no exception, and here’s why.
The US has enormous natural resources ready to be tapped, including 7.5 million tons of lithium reserves, according to the US Geological Survey. That ranks fourth in the world, two spots ahead of China. And prospective producers are lining up, waiting for government regulators to approve lithium mining operations from California to North Carolina.
My company, Galvanic Energy, is developing a brine prospect in Arkansas’s Smackover Formation that comprises the most concentrated source of lithium brine in North America.
And there are prospects, such as Rhyolite Ridge, Thacker Pass and the Salton Sea, which have enormous production potential. Eventually, these and other projects will produce, and imagine the impact they will have on the Chinese stranglehold. These mines will soon be feeding lithium into a US supply chain serving the largest automotive market in the world.
The US has more vehicles than any other country, with an estimated 276 million on American roads in 2019. The American transition to electric is already underway and there are 276 million reasons to think that years of blue sky are ahead for the US EV battery industry. Why do you think GM, Ford and others are spending billions to build EV battery manufacturing infrastructure in the United States right now?
There is no doubt that Gavekal’s conclusions about current Chinese dominance are accurate. The Chinese moved first, made the investments and now they’re leading the game.
But does that head start mean China will emerge as the Saudi Arabia of the EV industry? Not necessarily. Unlike oil, lithium is everywhere in the world and technology knows no borders. Markets grow, supply chains evolve and free enterprise will reign as it has for hundreds of years.
There is a lot of opportunity still available in the EV battery industry, and lo and behold, the Americans are making up ground.
Brent Wilson is CEO of Galvanic Energy, a geoscience-driven resource exploration company. Employing innovative, proprietary discovery methods to identify natural resources essential to the US renewable energy sector, Galvanic Energy develops resource plays that require low environmental footprints and utilize the least invasive extraction processes to provide vertical integration of green technologies toward the development of electric mobilization and energy storage.
