Partnership with Controlled Thermal Resources

In its press release, General Motors has agreed to form a strategic investment and commercial collaboration with Controlled Thermal Resources. This agreement basically aims to secure local and low-cost lithium.

Companies will apply a closed-loop, direct extraction process to obtain this lithium. As a result, they can expect a smaller physical footprint, no production tailing and lower carbon dioxide emissions compared to traditional processes. To realize more affordable, higher mileage electric vehicles, lithium becomes a metal crucial.

First mover advantage

Both GM and CTR will accelerate lithium extraction methods in this partnership. This is because the way will reduce its impact on the environment. CTR’s Hell’s Kitchen Lithium and Power development will produce a significant amount of GM’s future battery-grade lithium hydroxide and carbonate. Thanks to the GM’s investment, CTR’s closed-loop, direct extraction process will recover lithium from geothermal brine.

General Motors has already announced its plan to invest $35 billion in EVs and autonomous vehicles. In fact, GM will be the first company to make a multi-million dollar investment in CTR’s Hell’s Kitchen project. As it is the first investor, GM will have first rights on lithium produced by the first stage of the Hell’s Kitchen project. What’s more, it includes an option for a multi-year relationship.

Lithium is the key of EVs

Batteries are and will remain one of the largest cost drivers of electric vehicles. In addition to this, lithium is a key battery material used in the cathodes and electrolytes of GM’s EVs. For example, they will be the Chevrolet Bolt EV and Bolt EUV.

Thus, lithium will become even more important in battery use. However, the company relies on most lithium used in lithium-ion batteries outside of the U.S. now.

Value Chain

Like the article about Volkswagen, automotive giants are seriously considering they will produce batteries for their electric vehicles. Of course, the reason behind these actions to reduce the cost of batteries. As a result, automotive manufacturers try to make their EVs more available and affordable for people in the world.

In this context, we can safely say that the partnership between GM and CTR takes further step. In other words, GM wants to not only produce batteries by themselves but be involved with the value chain more. If GM can secure lithium in lower cost, the company has more opportunities to set the price of their EVs. If it wants to increase profitability, the price of EVs will be the same. If the company wants to make more consumers purchase an EV, the price will be lower. Thus, the more GM is involved with its value chain, the more power to decide the final price it has.

In addition to this, rely on the imports can be risk. In 2021, automotive manufacturers face the shortage of semiconductors. As a result, though there is huge demand in the industry, the automotive companies cannot help but stop their factories’ operation. Therefore, they rethink the supply chain so that they want to secure enough components.

Of course, the plan is always different from the reality. We do not know how the project will be going on. However, one thing for sure is that General Motors has taken further step to advance all-electric future.