Here is part of the discussion:
ahfoo replied to
iGoalie 7 hr. ago
The economics of battery chemistry also changed dramatically in the last several years, the Ultium batteries were cobalt cathode which can hardly compete with LiFePO4 that contain no rare materials. This was offset for a brief time by a lithium bubble that deflated just this last year.
The bubble, itself, was created by the expiration of the LiFePO4 patents approximately a year earlier. LiFePO4 was always a superior chemistry for vehicle batteries because it does not heat up to the same degree as other chemistries and thus doesn't need a complicated cooling system or have the same risk of fire making it cheaper and simpler to design.
In the past, this was offset by the exorbitant fees that were being extracted by the patent holders to restrict its use to very expensive applications where safety was paramount like electric buses for example. After the patents expired, any battery maker had the option to move into manufacturing LiFePO4 without paying the billionaire tax and their use exploded igniting a bubble in the one component that had supply chain bottlenecks: lithium.
However, lithium was never rare to begin with and soon production exceeded demand and the price quickly returned to historical low levels and it should be noted that the lithium content of a lithium ion battery is typically less than ten percent of the cost of the battery anyway. This is one reason why switching from lithium to sodium doesn't reduce costs as much as it would seem. It's irrelevant though because lithium never was rare and never will be.
In that scenario, GMs Ultium batteries were doomed because although it is true that the cobalt price has also come off its peaks in 2022, it remains an expensive material compared to lithium and has fundamental supply constraints.
GM will find little choice but to do as Ford has already done and make a commitment to Chinese LiFePO4 batteries if they want to produce EVs that can compete on price with the Chinese offerings. If they don't, they will be conceding the market to those who do, namely Ford, Nissan, Hyundai, Volkswagen and a dozen others.
