Battle for lithium: carmakers buy in from miners
Rising demand for lithium drives auto industry to secure direct access

The automotive industry is in a phase of transition toward electromobility. An essential part of the transition to zero-emission vehicles is the use of lithium-ion batteries. Lithium is therefore a raw material that is becoming increasingly important. Elon Musk has already referred to it as the "oil of the 21st century." Demand for the metal is expected to continue to rise, which has led to a remarkable rally in commodity and mining companies.
Automakers are now trying to secure access to the coveted raw material. General Motors has already made a $650 million investment in Lithium Americas, securing supply rights for ten years. The automaker is not the only one to have entered the market. More acquisitions are expected to follow. Tesla is said to be very interested in Sigma Lithium, a smaller player that could supply the Texans with raw lithium for their refineries, according to media reports.
Buying mining companies not only gives automakers access to raw materials, but also increases pressure on competitors. Those that do not have their own access to the raw material later could face operational problems. Therefore, it is expected that there could be a run on lithium mining companies within the next few months. Especially small and medium-sized companies that still have open large-scale projects to finance are an attractive takeover target for the cash-rich auto industry.
Mining companies are well positioned to meet rising demand. The rare metal is a critical component of battery technology, and as electric vehicles become more widespread, demand is likely to increase further. As a result, prices could also continue to rise, which would further boost mining companies' profits.
However, there are also risks. If demand for lithium does not grow as strongly as expected, prices could fall. In addition, there are always concerns about the environmental impact of lithium mining, as it can have a significant environmental impact. Therefore, it is important that companies act responsibly and use sustainable methods to extract the raw material.
Overall, it remains to be seen how the market will develop and whether there will indeed be a major bidding war for lithium mining companies. What is certain, however, is that the raw material is a crucial factor in the switch to electromobility and is therefore of great importance to car manufacturers.
