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Lean into the lithium bear market, says battery exec

A pilot lithium processing plant for Mangrove Lithium

A pilot processing plant near Vancouver, B.C., built by lithium startup Mangrove Lithium. Photo: Courtesy of Mangrove Lithium

Right now is the best time for battery manufacturers, investors, and policymakers to invest in the battery supply chain in North America, says Annie Liu, chief commercial and strategy officer at lithium processing startup Mangrove Lithium.

Why it matters: Lithium prices have plummeted by 80% from a peak in 2022 as oversupply, slower-than-expected EV growth and high interest rates have depressed the lithium market.

Zoom in: "Timing is important because the commodity market is rather volatile," says Liu, who was previously head of supply chain, battery and energy at Tesla and also worked on securing a battery supply chain for Ford.

  • Lots of companies invested two years ago when the lithium market was ultra-high and irrational, Liu points out, adding it's key for automakers to strike deals with suppliers to protect themselves from volatility.
  • Liu says despite support from the Inflation Reduction Act, there needs to be more investment into creating a North American battery supply chain because it's not growing quickly enough to challenge China's dominance.
  • "At the current speed that it is going, I don't think it's going to enable competition with China, even with the IRA," says Liu.

Driving the news: Liu just joined startup Mangrove Lithium last month.

Catch up quick: Lithium is a key ingredient in lithium-ion batteries that power electric vehicles and grid batteries.

  • Following Tesla's lead, North American automakers have been investing in trying to secure lithium supplies for the batteries that will power their EV transitions.
  • The IRA has also funneled historic billions of dollars into lithium projects and technologies to build an American battery supply chain.
  • Mangrove, based in Vancouver, Canada, has developed a technology that refines lithium into battery-grade materials more efficiently and with less waste and less cost.

The latest: Mangrove has a pilot plant that is producing battery-grade lithium for early customers.

  • The company is also working on developing a commercial plant and is currently raising capital for that project, says Liu.
  • Mangrove is backed by Breakthrough Energy Ventures, BMW i Ventures, and the Business Development Bank of Canada.

What's next: Liu predicts that the lithium market will continue to go through more roller coasters, but those oscillations will likely be much smaller compared with the past few years.

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