EV battery prices may keep falling as largest lithium deposits found on tribal land in Nevada

After Exxon Mobil found lithium deposits in Arkansas enough for 50 million electric vehicles, now it is time for the Nevada border with Oregon to shine in the EV era. Tucked under an ancient volcano, the Thacker Pass Lithium Mine could hold up to 40 million metric tons of lithium, according to new research. Such an amount can go into battery-grade carbonate that can power all of the world's future electric vehicles for many decades.

The clay bed of the southern rim of the McDermitt Caldera has been formed by multiple volcano eruptions that transformed the magnesium smectite, a typical source of mined lithium, into illite clay. This has essentially doubled the usual concentration of the strategic raw material at the Thacker Pass Lithium Mine.

The research that found the mine with the world's largest lithium deposits was funded by Lithium Nevada, LLC, a subsidiary of the Lithium Americas Corporation (LAC), which owns the place. Unfortunately, the Thacker Pass Lithium Mine sits on sacred tribal lands and important biodiversity habitat that could complicate any large-scale extraction process.

After months of public hearings with the Orovada community and the Fort McDermitt Paiute and Shoshone Tribes, the Nevada Division of Environmental Protection gave LAC the necessary air, water, and mining permits to begin extraction. The revised permits, however, forbid it to mine under the water table and the miner will also have to escrow "over $47 million in financial assurance to guarantee revitalization of the site after the mine closes."

In any case, just when analysts were predicting a rebound of lithium carbonate prices after the drastic nosedive this year that saw them fall 80% from their peak, giant deposit discoveries may continue to put downward pressure on them. As a result, EV makers may enjoy a further drop in battery costs and better margins.

EV battery prices fell 10% just last month, while Tesla's supplier CATL lowered the tag of its LFP cells that go into the Model 3 and Model Y by 20%. Together with production cost optimizations, the plunge in battery prices allowed Elon Musk to commence a veritable price war that still decimates the profit margins of other EV makers, save for the vertically integrated BYD that makes its own batteries.

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