Volvo CEO, Jim Rowan, recently made the bullish claim by 2025 electric Volvos will cost the same as gasoline cars. He speculates that this will be due to the battery technology which he thinks will be much more advanced and efficient by then. He said that electric cars will use smaller battery packs and will have better range, in addition to new battery chemistries that won’t require as much lithium.

The company has one of the most ambitious plans among the global automakers, to switch to only all-electric car production  by 2030. Volvo is withdrawing from any combustion engine development programs and manufacturing and is focusing purely on electric drivetrain development. The company claims that by 2025 at least half of its production will be electric vehicles, the other half will be hybrids.

Battery grade Lithium carbonate (LiCO3) which is currently used in today's electric vehicles, went from $28,400 USD a metric ton in November 2021 to nearly $85,000 USD last week. In November 2020 that price stood at just over $5,500 - that’s a 15 and half times price increase in just two years. On average an electric car battery needs 850 grams of Lithium carbonate per kWh of its capacity -  there is 85 kg of it in the battery of Tesla Model X and its cost went from $470 two years ago to $7,225 today. That’s just Lithium - the same happened to cobalt, phosphate, manganese, nickel and even iron.

With the global goals of car electrification having very aggressive deadlines, the costs of raw materials will likely only go up. Manufacturers will be forced to re-invent batteries and develop new technologies in order to make batteries smaller and use less expensive minerals.

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