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Metal Shortages and Escalating Costs May Short-Circuit Green Energy Schemes

Metal Shortages and Escalating Costs May Short-Circuit Green Energy Schemes

GM Electric Battery Engineer: “We have neither the raw materials nor the manufacturing capacity” to support massive transition away from fossil fuels.

In the wake of the explosion in gas prices, Biden and his posse pushed the need to transition to electric vehicles to “reduce reliance on fossil fuels.”

Apparently, politicians and green justice advocates forget that, like oil, components of electric batteries come from the Earth.  Therefore, they are subject to supply chain challenges, shortages, and rising prices.

A good example is nickel.  The price of this electric battery component is surging, as it turns out Russia is a key supplier of the metal.

In an unusual step, the London Metal Exchange suspended nickel trading on Tuesday morning after three-month contract prices more than doubled to over $100,000 per ton.

Nickel is a critical ingredient in the lithium-ion battery cells used in most electric vehicles sold in — and planned for — the U.S. market. Its abrupt price surge has analysts and investors raising hard questions about automakers’ ambitious electric-vehicle programs.

Morgan Stanley auto analyst Adam Jonas has been among the loudest voices raising concerns. In a note published Monday, he said: “As of this writing, nickel is up 67.2% just today, representing around a $1,000 increase in the input cost of an average EV in the U.S.”

Jonas wrote that investors should reduce their expectations for automakers’ earnings, and for electric-vehicle sales penetration over the next few years, as nickel’s abrupt price surge could undermine the ambitious EV plans put forth by global automakers including General Motors and Ford Motor.

Bob Galyen, who engineered the battery for the General Motors EV1 (the first mass-produced electric vehicle) underscores problems with other critical electrical battery components as well as the fact this country refuses to tap into its own extensive resources.

Simply building and selling electric cars, or providing subsidies for the people who make and buy them, isn’t enough. Electric cars need batteries the same way combustion cars need fuel — and the metal in those batteries can be just as precious and hard to get as gas. People like Galyen are worried the US simply isn’t ready for that switchover, or doing enough to get ready.

The United States sources about 90% of the lithium it uses from Argentina and Chile, and contributes less than 1% of global production of nickel and cobalt, according to the Department of Energy. China refines 60% of the world’s lithium and 80% of the cobalt. Those metals are critical for electric vehicles.

Galyen said he’s struggled to get the United States to create a long-term plan for electric batteries, instead watching as priorities shift depending on what political party holds the White House. The Biden administration has pushed for electric vehicles, yet halted mining projects in Arizona and Minnesota that would boost domestic supply of electric vehicle materials.

“We have neither the raw materials nor the manufacturing capacity,” Galyen told CNN Business. “If the wrong country goes to war with us, we don’t have enough batteries to support our military.”

I will point out that many of the elite laughed off President Donald Trump’s bid to purchase Greenland from Denmark. It turns out that Greenland has many of the resources necessary to support the electrical vehicle industry.

The prospect of prolonged geopolitical tensions is likely to accelerate attempts by the United States and Europe to develop domestic supplies of commodities that often come from Russia. There are nickel deposits, for example, in Canada, Greenland and even Minnesota.

“Nickel, cobalt, platinum, palladium, even copper — we already realized we need those metals for the green transition, for mitigating climate change,” said Bo Stensgaard, chief executive of Bluejay Mining, which is working on extracting nickel from a site in western Greenland in a venture with KoBold Metals, whose backers include Jeff Bezos and Bill Gates. “When you see the geopolitical developments with Ukraine and Russia, it’s even more obvious that there are supply risks with these metals.

Once again, it appears that Trump will get the last laugh.

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Comments

“We have neither the raw materials nor the manufacturing capacity” to support massive tranisiton from fossil fuels.

Wow! This is totally unexpected! Who could have possibly forseen such a thing? Whatever will we do now? Too bad Biden didn’t know this last year before he jumped the gun and shut down our oil well production and new pipelines.

What we need is a president who can play 3D chess instead of, “Do you have any oil we can borrow?”

“Go fish.”

    JohnSmith100 in reply to Peabody. | March 20, 2022 at 3:42 pm

    I loved 3D chess, then I discovered business which is so much more complicated. I spent my life constantly examining possible moves by opponents and having layers of responses ready. Unfortunately, today I am just another retired old fart. But it was fun while it lasted.

2smartforlibs | March 20, 2022 at 12:45 pm

In all the unnecessary pearl-clutching about the environment. They never ask the real question. Like how does the Milankovitch cycle plays in, meaning the climate changes, or the fact the 6500 of the last 10k years have been warmer than now. What’s the correct temp? How about since Oil is the blood that makes the world work and their green raw deal only provides a fraction of the energy we need do we go back to the middle ages or do we find a better way.
Liberal Playbook: Never think past the knee jerk.

    JohnSmith100 in reply to 2smartforlibs. | March 20, 2022 at 3:54 pm

    Is oil use going to delay the next ice age? Is it in our interest tweak climate for the next 1000 or more years by mining all that stored methane deep in the ocean? Can we prevent a sudden release and harness all those hydrocarbons? Can we improve our own climate while degrading adversary’s climate?

Sanctions are having their intended effect. Now if we can just get abort or otherwise rid ourselves of the deplorable Gaddafi… Putin, and deal with the oligarchs, thus far tempered, directly.

    MattMusson in reply to n.n. | March 20, 2022 at 6:17 pm

    EVs need 13 critical metals from 13 supply chains stretching through 60 countries. Half run through Russia. And Biden closed the only remaining US nickle mind last summer.

    But as long as the Chinese release enough Rare Earths and child miners in Africa are brutalized into digging enough Cobalt, I am sure that Green cars will be produced.

    Throw in some Balsa Wood clear cut from the Amazon Rainforest and you can build a Wind Turbine to generate the electricity.

      Maybe green cars will be produced, but will they be bought. People may be struggling with a $5 loaf of bread. Also, after that ship went down loaded with VW high end cars because of battery fires that could not be put out, I would not consider one. One catches fire in your garage and your house could be gone.

Profits through labor and environmental arbitrage invariably have a short half-life. Following these practices in nations that have practical and actual slavery, an established Pro-Choice religion (e.g. one-child/selective-child), indulge diversity, inequity, and exclusion (e.g. racism), is deplorable. Relying on theses practices in nations that are not dependent on external resources and are in the process of mitigating progress, is myopic at best, insane at worst. The 2014 Biden/Maidan/Slavic Spring, now 32 trimesters later, is unlikely to offer the relief they hope and dream.

That free lunch is coming, it’s coming…………………………………………….

Wait until they show us their new perpetual motion generator.

LG announced a few weeks ago that they were closing a plant in Huntsville that made solar panels; they couldn’t source the necessary materials to continue manufacturing.

You know who else is a key supplier of nickel? The Ukraine.
As for Biden and the EPA etc….They are all insane, incompetent and intractable.

    JohnSmith100 in reply to puhiawa. | March 20, 2022 at 4:14 pm

    It would still be best to have domestic production of crucial item, Ukraine will remain vulnerable, even if they prevail.

    henrybowman in reply to puhiawa. | March 20, 2022 at 8:00 pm

    A nickel shortage?
    Oh no! This is disastrous!
    Are you SURE we can’t substitute unicorn poop?

JackinSilverSpring | March 20, 2022 at 3:45 pm

How about we simply give up on automotive transportation and go back to horse and buggies. We would so much less dependent on fossil fuels and other minerals. Of course, our standard of living would drop like a rock, but just think we would be saving Gaia, even if a couple of (billion) people have tro die.

Subotai Bahadur | March 20, 2022 at 3:56 pm

The availability or unavailability of various items on the periodic table of elements are a matter of reality. To Collectivist Socialists like the Democrats, reality is mere bourgeois sentimentality and is not allowed to stand against the all-important Narrative. If what is demanded by the State cannot be produced, it has to be because of the weakness of effort by the producers and the only cure for that is condign force applied by the State against those slackers and saboteurs who are hampering the effort.

Said slackers and saboteurs will, of course, falsify the amounts or quality produced, but that will not protect them from the Peoples’ Justice.

Of course to them, elections are also mere bourgeois sentimentality too, and they will supply any figures needed for the vote count.

[ I will let y’all decide if a /sarc belongs there]

Subotai Bahadur

My son’s company designs car batteries….all the car vendors are madly having them test US supplied materials. Their lab was considered “essential” and never shutdown during all the crazy CA Covid lockdowns.

Anyone check with Peter the Puffer for his take on this EXTREMELY IMPORTANT ISSUE? I’m sure he’ll just do that “Howdy Doody” smile and say something profoundly stupid!

The underlying issue seems to never be addressed, even within this post. Where in the hell does the electricity to power the magical electric vehicles come from? Without nuclear on the table, fossil fuels will be the workhorse of electricity generation for the foreseeable future.

I heard aoc is planning on millions of acres of trees so we can mine billions of tons of wooden nickels.

    jb4 in reply to 4fun. | March 21, 2022 at 11:03 pm

    It’s too late to plant trees. Forget electric cars. We only have until 2030. We need short term solutions. I think we need to obliterate Ukraine and drive fertilizer prices up many times more. If famine can kill half the world’s population, there will be a lot less of man-caused global warming to worry about. A nuclear winter would help too.