Keith Phillips of PLL, which is one of the few America-based lithium mining operations, recently told Yahoo Finance that there will be a "real crunch" to get enough lithium to meet worldwide EV targets.
"Yes, we'll have enough, but not by that time," Phillips said. "We do not have enough in the world to turn that much lithium production in the world by 2035."
Lithium is an essential component of any EV battery and an average EV battery requires eight to 10 kilograms of the material found in lithium carbonate, the ore which is sought by miners.
The increasing demand for the metal has driven the price of lithium carbonate to almost double this year alone, and the International Energy Agency projects demand more growth -- by at least 40 times in the next 20 years.
Moreover, President Joe Biden called for half of all new vehicles sold by 2030 to be electric, setting aside billions of dollars in the Inflation Reduction Act (IRA) to this end. The IRA seeks to reduce carbon emissions by as much as 40 percent and incentivizes drivers to buy electric and fuel cell vehicles by providing up to $7,500 in tax credits. The full amount of the credit is only provided if the vehicle is manufactured in the United States.
The mining firm reportedly plans on opening a processing plant in Tennessee next year to support the country's increasing demand by manufacturing 30,000 metric tons of lithium per year. However, that is said to be a small-time operation when compared with Australia, Latin America and China, which conducted about 98 percent of the world's lithium mining in 2020.
But even if these regions' mining operations expand about 20 percent year over year, Phillips is still skeptical that the world's EV goals will be achieved.
"The world has changed. We are now in an era where everyone's going to want an electric car. The car companies can't make them fast enough, and people are now looking for the lithium they need for the batteries to go in those electric cars," he told the news outlet. "Energy security is a national issue."
Major lithium miner in Chile is also having production setbacks
The Chinese EV giant BYD Co., which won a government contract to mine lithium in the Salar de Atacama earlier in the year, is also having production issues as indigenous residents took to the streets and demanded the tender be canceled over concerns about the impact on local water supplies. (Related: EU lawmakers pushing to classify lithium as hazardous substance, which could be a problem for EV market.)
Salar de Atacama, the largest salt flat in Chile and hailed as the Saudi Arabia of lithium, holds 55 percent of the world's known deposits of the metal. But before BYD could even tap into the resource, the Chilean Supreme Court threw out the award, saying the government failed to consult with indigenous people first.
"They want to produce more lithium, but we are the ones who pay the price," Lady Sandón, president of an Atacameño indigenous community, said.
The number of electric cars on roads by the end of 2021 was about 16.5 million, three times the number in 2018. Analysts now worry that South America could become a major bottleneck for growth in electric vehicles as the lithium supply needed for the batteries dwindles.
"All the major car makers are completely on board with electric vehicles now, but the lithium may just not be enough," said Brian Jaskula, a lithium expert at the U.S. Geological Survey.
Chilean President Gabriel Boric's leftist government plans to create a state lithium company. He denounced past privatizations of raw commodities. So a new constitution, if approved in a September referendum, would strengthen environmental rules and indigenous rights over mining.
"This is a strategic resource for the energy transition," said Chile Mines Minister Marcela Hernando, who recently told their Congress that while the government did not have the expansive knowledge to mine lithium on its own, it would insist on the majority control of any joint venture with private firms.
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