The price of lithium plummeted by over 80 percent last year because too many new mining projects emerged in a short period, while demand visibly slowed down. Why are the government and lithium mining promoters in Serbia overlooking or hiding this from the public? Is it due to a lack of information, ignorance, bad intentions, or corruption?
If you warn them…
you will save your soul.
Ezekiel 33:9
The so-called new “green economy,” which supposedly does not pollute the environment, has become a hot topic in heated discussions in politics, investments, and production. Developed countries are racing to be leaders in implementing such policies. However, there are still many unknowns and uncertainties in these directions. Let’s look at a few related to the potential large-scale transition to a new type of electric vehicles and the consequences this may have on consumers, employment, the environment, and the overall economy.
Electric vehicles are one of the pillars of the “green economy.” They consist of about 7,000 parts, while liquid-fuel cars have around 32,000. This brings numerous topics for discussion and certain concerns.
While seeking energy savings, governments in many countries are providing massive subsidies for the production and purchase of electric cars. What kind of economic policy is this? What is its goal? Which lobbies influence such a policy? Is there corruption involved?
An electric car is over 30 percent more expensive than an identical liquid-fuel model, and its production requires fewer workers. The maintenance of electric cars is simple and rare, so fewer mechanics and service centers are needed. In case of damage, the batteries located at the bottom of the chassis usually cannot be repaired and must be completely replaced, and they are one of the most expensive parts of the car. The insurance cost for such vehicles is about 30 percent higher compared to an identical gasoline or diesel model.
Advantages and Disadvantages
The weight of battery-powered vehicles also increases insurance costs. Each such vehicle is up to half a ton heavier than a liquid-fuel vehicle, which can lead to more serious consequences in a collision. Such heavy vehicles also wear down and damage roads more, resulting in additional taxes, as seen in Canada. These vehicles accelerate faster than standard ones, which can cause loss of vehicle control.
The lifespan of a battery is between 10 and 20 years, so there is almost no market for used electric cars. When the battery expires, it must be replaced, and it is the most expensive part of the vehicle. There is also the issue of where to charge the batteries if they run out during the drive and how long it takes to recharge them.
In this game, there will be few winners and many losers. The Serbian government should consider that it is more reasonable to preserve the nature in Jadar for the production of healthy food rather than mining lithium, which seriously pollutes the environment, for a small mining rent.
At low temperatures, lithium batteries lose their power. If the temperature is lower than minus 18 degrees Celsius, and the road is snowbound, the driver of such a vehicle “needs to wait for spring at that spot.”
How is the electricity for such vehicles generated? Is it in coal-fired power plants that pollute the environment? How are vehicle batteries made? Such production is associated with serious environmental pollution. The state of Maine recently banned lithium mining due to its detrimental environmental impact, while people in Nevada are protesting against such mining for the same reason.
Due to increased demand, power shortages are becoming more frequent in the Netherlands
The Netherlands is one of the leaders in introducing electric vehicles and the “green” economy. The problem is that increased electricity demand is overloading both high-voltage and low-voltage networks. Power outages are frequent in Rotterdam, Amsterdam, The Hague, and especially Utrecht. Similar issues are occurring in some German cities. The capacity of the energy infrastructure (networks, charging stations) is inadequate for the increased number of consumers causing congestion. How to increase the range and capacity of the network for current and growing demand? This is not feasible in the short term. What is the likelihood that electric vehicles will dominate in the future?
Felicity Ace was a huge transoceanic ship carrying nearly 4,000 luxury cars (Bentleys, Porsches, Lamborghinis, Audis, and others) from Germany to the USA. It burned and sank on March 1, 2024, in the middle of the Atlantic, causing $400 million in damage. The fire was caused by an electric battery in an electric Porsche. When such a battery catches fire, even if the fire is extinguished, it can reignite in the same spot. This requires new ships or expensive retrofitting of old ones for protection against such fires, increasing both transportation and vehicle costs.
In 2024, the sale of electric vehicles slowed down, and Apple abandoned its electric car project
After the trend of buying electric cars, their sales significantly slowed down in 2024, despite various relatively generous government subsidies to buyers. Ford, General Motors, and Rivian are reducing their workforce and pausing plans related to electric vehicle production.
Notably, Apple has completely abandoned the production of electric vehicles. The secret project that had been underway for ten years, associated with Apple’s diversification and production of such vehicles, has just been abandoned. Apple does not consider this type of production to have a profitable future.
There is also the curious “loud silence” of global corporations producing liquid fuels. Why are they silent? Are these giants investing in battery production? Or do they not trust that electric vehicles will be widely adopted? Or are they doing something that escapes the attention of both authorities and analysts?
Another sign of problems related to the slowdown in electric vehicle sales is port congestion, especially in Europe. Thousands of such cars, important for the “green agenda,” are unsold in ports. Despite generous subsidies and major price discounts, their sales have slowed down in the USA as well. Such cars still do not meet the needs and expectations of many buyers, who are turning more towards hybrid vehicles.
The struggles and dilemmas of economic policymakers
Economic policymakers are often split in their work and management of public funds. On one hand, they have the right to demand energy savings: light bulbs, household appliances, public lighting, and so on. On the other hand, they simultaneously provide massive subsidies for the production and purchase of electric cars, which use large amounts of electricity. So what kind of economic policy is this? What is its goal? How is that energy produced (in coal-fired power plants?) and at what cost? Which lobbies influence the policy? Is there corruption? What should be done?
There is also something very strange in the background. This is the “loud silence” of massive global corporations producing liquid fuels. These are economic giants whose assets and power are based on fuel production and sales. If life shifts to electric vehicles, what remains for those producing liquid fuels? Why have these giants been silent for so long? Are they investing in battery production? Or do they lack confidence that electric vehicles will become widely adopted? Or are they doing something that escapes the attention of both the authorities and analysts?
The government in Serbia needs to realize that lithium is outdated technology. New technologies based on sodium and graphene are spreading. The price of lithium plummeted by more than 80 percent on the international market in 2023, to $13,200 per ton. The reason is increased supply on the market. Too many new mining projects appeared in a short time, while demand for lithium and electric battery cars visibly slowed down. Why are decision-makers and lithium mining promoters in Serbia overlooking or hiding this from the public? Is it due to a lack of information, ignorance, bad intentions, or corruption?
New sodium-based batteries
With the help of new technologies, Swedish Northvolt has produced batteries without lithium, cobalt, and nickel, but based on sodium. Sodium is cheaper than lithium and is abundant in nature. Despite its abundance in seawater and certain advantages, sodium still has several drawbacks compared to lithium. First, it is heavier than lithium of the same energy storage capacity, so for smaller devices, lithium has an advantage. The second and perhaps greater disadvantage is the relatively late start of major investments in sodium battery production compared to lithium batteries.
Ford, General Motors, and Rivian are reducing their workforce and pausing plans related to electric vehicle production, while Apple, which had been secretly planning for ten years, has now completely abandoned the production of such cars.
Lithium has had an advantage for several decades, but circumstances are constantly changing. The West has made great efforts to reduce its dependence on gas and oil imports from Russia. Now it fears falling into a similar dependence if it relies on China, where most lithium is refined. If the prices of lithium, cobalt, and nickel rise, sodium battery production will have a bright future. The shift in demand towards sodium will cause a further drop in lithium demand.
How the supersonic airplane projects Concorde and Tupolev failed
Michael Kelly, professor emeritus of engineering at the University of Cambridge, draws attention to an interesting lesson from recent history. He compares the current inclination towards electric battery-powered vehicles with the Franco-British Concorde project from the 1960s and 1970s. Huge government funds were invested in creating a supersonic passenger plane. The Soviets did something similar with their Tupolev-144. The Americans tried similarly but withdrew immediately at the start as they saw no commercial benefit from such a project.
The operational costs of Concorde were high, and tickets were expensive. Only the wealthy could afford such flights and travel. After just 27 years of use, Concorde was retired in 2003. It was a great example of technological success but failed as a commercial project. The Tu-144 was even less successful, with only 55 commercial flights.
Michael Kelly, professor at Cambridge, compares the current inclination towards electric battery-powered vehicles with the Franco-British Concorde project from the 1960s and 1970s. Due to their expense, only the wealthy could afford such flights.
What does the Concorde project have to do with electric cars? Hundreds of billions of dollars and euros are being invested in the research, development, and production of these vehicles. Due to the high cost of such vehicles, only the wealthy can afford to buy them. These vehicles are used for local drives, while at the same time, they own another liquid fuel vehicle for longer trips. Consumers are willing to pay more for a certain product if they are convinced that they are getting something more and better compared to the previous product. However, significant obstacles are not only the price of these vehicles but also other previously mentioned issues. Kelly believes that the most likely outcome of this whole story will resemble the outcome of the Concorde project. If the authorities force the population to buy only battery-powered cars, then they should remember the situation in Cuba and the “Havana effect.” Liquid fuel cars, with careful maintenance, have been running for more than three generations since the U.S. stopped supplying parts and new vehicles.
When all of the above is considered, who will buy such expensive cars, especially in Serbia? Regarding success in this new type of production, there will be few winners, numerous losers, and “a lot of financial blood on the floor.” The authorities in Serbia should keep in mind that it is more reasonable to preserve nature in Jadar for healthy food production than to mine lithium, which seriously pollutes the environment, and for which a small mining rent is received.
Despite generous subsidies and large discount sales, the sale of electric cars has slowed down even in the U.S. Such cars still do not meet the needs or expectations of many customers, who are increasingly turning to hybrid vehicles.
After all, why is lithium being mined and the environment polluted? So that wealthy Germans, French, and Americans can drive expensive electric vehicles that do not pollute their living environment. It would be better to supply Zrenjanin with drinking water from Jadar via pipeline, as the residents of that city in northern Serbia have not had drinking water from the tap for a generation, while the promised local water factory would use many chemicals and much energy for its production, and that energy could be used for something more sensible.
Source : Radar
