A-shares even have the ridicule that “there is lithium all over the world”. As long as the market is stained with lithium-related concepts, the stock can soar to the sky.
Why has lithium battery become the new oil? Why is there a claim that China will become the future Saudi Arabia? What challenges does lithium battery face as the “new oil” in the future?
Why has lithium battery become the new oil?
From the general background, carbon neutrality has become the most important theme of future global development.
The significance of energy security in international competition is self-evident. Oil is known as the blood of industry. In the past few decades, every large-scale war in the world has been directly or indirectly related to oil. But today, as the global environmental burden reaches its limit and extreme weather occurs frequently, carbon neutrality has become the consensus.
In 2016, 178 countries around the world concluded the Paris Agreement, a climate change agreement, and made a unified plan for emission reduction goals and actions after 2020. The long-term goal of the agreement is to control the increase in global average temperature within 2 degrees Celsius compared with the industrialization period, and make every effort to Controlled within 1.5 degrees Celsius. Since then, China, the United States, and Europe have successively issued carbon neutrality goals. Among them, the United States and Europe set the carbon neutrality time point as 2050, and China proposed that carbon emissions should peak by 2030 and achieve carbon neutrality by 2060. the “3060 goal”.
Taking my country as an example, my country has further refined its carbon neutrality goal, proposing that the energy consumption per unit of GDP and carbon dioxide emissions will be reduced by 13.5% and 18% respectively during the 14th Five-Year Plan period. By 2030, the energy consumption per unit of GDP will be significantly reduced. The carbon dioxide emission per unit of GDP has dropped by more than 65% compared with 2005, and the proportion of non-fossil energy consumption has reached about 25%. To achieve such goals, energy transition is imperative.
In terms of the total amount of carbon emissions, according to the International Energy Agency (IEA), the transportation industry is the second largest carbon-emitting sector in the world, accounting for 25% of carbon emissions, which is the main factor causing global climate change. Therefore, achieving carbon emissions in the transportation sector is crucial. As a result, the world has set off a wave of investment and research and development of electric vehicles. Lithium battery is the most mature and most economical automotive power source technology.
This also means that carbon-based energy, represented by oil, is accelerating its withdrawal from the stage of history. Instead, salt lakes and lithium mines.
Lithium is an indispensable element for electric vehicles. In the cost of an electric vehicle, the battery system accounts for the highest proportion, close to 40%. In the era of new energy, whoever controls the commanding heights of lithium batteries will control the development rights of other countries, and thus lithium has another name – “white oil”.
Lithium batteries will be compared with oil. In the final analysis, it is the comparison of new energy vehicles and traditional fuel vehicles. As an important power source for new energy vehicles and fuel vehicles, lithium batteries and petroleum play an important role respectively. In times of “new and old”, comparisons are always inevitable.
According to the data of the China Automobile Association, in the first half of this year, the sales of new energy vehicles achieved year-on-year growth for six consecutive months. Even in the March to May when the overall decline in the Chinese auto market, the sales of new energy vehicles were still able to achieve 114.1%, 44.6% and A substantial increase of 105.2%.
In the first half of 2022, my country’s new energy vehicle production and sales volume reached 2.661 million and 2.6 million respectively, with a year-on-year increase of 120%. Although the overall production and sales volume of fuel vehicles has not exceeded, in some market segments, new energy vehicles have squeezed into the top ten or higher positions on the list.
In the context of the gradual increase in the penetration rate of new energy vehicles and the gradual replacement of traditional fuel vehicles, lithium batteries, as the power source of new energy vehicles, are also replacing the status of traditional oil and becoming “new oil”.
China, Saudi Arabia in the new energy era?
In the age of fossil energy, whichever independent sovereign country has the largest oil reserves and exploitation, whichever country will have the advantage in the international competition. The same is true for the new era of “new oil” lithium batteries.
Over the years, in order to seize the first-mover advantage of lithium batteries, several major powers have launched fierce competition and even melee. In the 1970s and 1980s, lithium battery technology was born in Europe and the United States. Americans first invented lithium cobalt oxide, lithium manganate and lithium iron phosphate batteries, taking the lead.
In 1991, Japan was the first to industrialize lithium-ion batteries, but it was followed by South Korea. In the 21st century, with high-level support, China has made the lithium battery industry the world’s first step by step.
Judging from the current market share of lithium batteries in various countries around the world, China is indeed “leading the world” as Musk said. According to data from the global research agency Bloomberg NEF, China’s share of the lithium-ion battery market may currently be as high as 80%. Among the top ten electric vehicle battery manufacturers in the world, seven companies are Chinese companies. Among them, CATL leads the world. Electric vehicle batteries have a global market share of about 30%, and the current market value is even higher than that of PetroChina. and Sinopec combined. As the power source of new energy vehicles, the advantages of lithium batteries give China an advantage in the entire new energy vehicle industry chain.
In addition, China also occupies an absolute leading position in the world in the field of photovoltaics, and also occupies an absolute market share in the core sectors of the industry such as silicon materials, silicon wafers, cells, modules, and inverters.
Leading the world in the development of new energy, many people say that China will lead the development of global new energy and will become the “Saudi” of the new energy era.
But is it really so? If we only look at the production and consumption of power batteries, China does have a leading position. At present, China has the largest shipment of power batteries in the world, but China still needs to import a large amount of lithium raw materials. According to the data of the Institute of Mineral Resources of the Chinese Academy of Geological Sciences, by 2025, compared with the domestic demand of 433,800 tons of lithium carbonate equivalent, the domestic supply will only be 180,000 tons, and there will be a gap of 253,800 tons, and the external dependence of demand will be as high as 58.5%. .
In terms of reserves, as the world’s largest producer and consumer of power batteries, China’s lithium ore reserves are facing serious shortages. According to data from the US Geological Survey, as of 2021, the world’s proven lithium reserves are about 470 million LCE (lithium carbonate equivalent), while China only accounts for 6%. Looking at the industry as a whole, most of the supply of lithium resources is concentrated in Australia, South America and other places, due to the large reserves of local lithium resources and excellent resource endowments. Among them, spodumene concentrate is mainly used to make lithium hydroxide, and lithium extraction from salt lake is mainly used for lithium carbonate production.
Of course, under the circumstance of insufficient domestic lithium resources, domestic leading lithium mining companies have also deployed overseas minerals, such as Ganfeng Lithium’s acquisition of Lithea, which holds the lithium salt lake project in Salta Province, Argentina, and Xinwangda’s acquisition of Argentina lithium mine The Laguna Caro mining tenement project held by the company GOLDINKA ENERGY S.A.
These overseas layouts will also further alleviate the shortage of domestic lithium resource reserves.
Who can compete with lithium battery “new oil”?
Relying on the advantages of high energy density, high power density and other aspects, lithium batteries have completely occupied the consumer electronics market in a short period of more than ten years, and have expanded to the field of electric vehicles. Judging from the development of the current battery technology route, lithium battery is a well-deserved “king”, and Musk even called it the “new oil” of the future. Apart from Musk’s support for lithium batteries to represent his own interests, today’s emerging technologies such as sodium-ion batteries, all-vanadium flow, lead-carbon batteries, etc., are far behind lithium batteries in terms of technical maturity and commerciality. .
Of course, technological progress never ends. Lithium batteries are currently favored by the world and regarded as the “new oil” in the future, but this is far from the end. Only from the perspective of the energy source of the battery, the current fuel cell such as hydrogen energy is another promising technology route, and for the chemical battery, there are also emerging technologies such as the sodium-ion battery. Therefore, maybe in the near future, we will be able to use new energy vehicles that are safer, more cost-effective and more convenient.