373

Million Dollars

in average revenue between 2018-2020

14686

Metric Tons

of battery-grade lithium mined in 2020

18.22%

CAGR

in revenue from lithium hydroxide between 2016 - 2020


The Path to Drawdown: Batteries for Electric Vehicles

The first electric vehicle (EV) prototype was built in the early 19th century, but internal combustion engines dominated the automotive landscape since the 1920s because of EVs’ inability to overcome the challenge of building a lightweight, durable battery with adequate range.

Today, that landscape is changing. Because of supportive government policies and declining costs, there are millions of EVs on the road. The difference in their carbon footprint is remarkable. Compared to internal combustion engine vehicles, emissions drop by 50% if an EV’s power comes from the conventional electrical grid. If powered by solar energy, emissions are cut by 95%. And once households purchase EVs, costs to operate and maintain those cars are often cheaper than gas-based cars.

What used to be an obstacle for EVs - the question of how far the car can go on a single charge - is now much less of a concern. The average range of EVs produced in 2020 is about 217.5 miles, up from 124 miles in 2015

What’s making this increase in mileage possible is the development in battery technology and growth in battery production capacity. The cost of batteries is falling fast as a result. The cost of lithium-ion batteries in particular - the key technology for electrifying transport - has declined sharply in recent years.

But battery production needs to continue scaling massively to keep up with the electrification of the transport sector. According to the IEA:

  • Global manufacturing operations produced 170 GWh of batteries in 2020
  • ~3,000 GWh battery production capacity is needed by 2030 to achieve long-term sustainability goals
  • That’s CAGR of 33.25%

About

Livent Corporation (stock ticker: LTHM) is a lithium company that is focused on producing battery-grade lithium hydroxide, butyllithium and highly purity lithium metal. Headquartered in Philadelphia, PA, Livent has seven manufacturing sites across four continents.

LTHM's Role in Drawdown

Livent mines and sells lithium compounds that are applicable to a number of industrial end markets. About 55% of their sales revenue comes from lithium hydroxide, a key component (p. 8) of lithium-ion batteries for EVs, as well as energy storage systems, e-bikes and power tools.

Livent produced almost 37,500 metric tons of lithium compounds, 39.2% of which were lithium hydroxide. Its production has been on the rise over the last few years, undergoing a 13.81% annual growth. Livent has partnered (p. 8) with leading producers and original equipment manufacturers including Tesla, BMW Group and LG Chem to sell its lithium compounds.

Livent reports that an industry study (p. 10) named Livent as one of the five largest producers of lithium compounds in the world. These five producers accounted for 64% of the global refined lithium production in 2019, and this share is expected to grow.

LTHM: What We Like

Livent has a solid track record of setting and meeting ambitious sustainability targets, particularly in the last three years:

  • Livent committed to reduce GHG intensity by 30% across its operations by 2030, and carbon neutrality by 2040
  • Goal to transition 30% of its energy mix to renewable sources by 2030, a first step to 100% renewable energy 
  • Dedicate the majority of R&D spending to develop or support green technologies, processes and products by 2022

In addition, Livent is making an effort (p. 23) to extract lithium in a responsible manner:

  • Livent uses a comprehensive environmental system to manage and record parameters such as water flows, chemical transport and salinity
  • Began Initiative for Responsible Mining Assurance certification
  • Contributing to a study of sustainable lithium mining in collaboration with leading US universities
  • Reduced water intensity by using water reuse/recycling process technologies

LTHM: What We Want to See Improve

Direct Greater Focus to Lithium Hydroxide


As Livent makes clear in its investor presentation (pp. 12-13), the continued EV market growth in the next decade will be increasingly driven by lithium hydroxide. Currently, 55% of Livent’s revenue comes from selling lithium hydroxide. We want Livent to direct even more effort to producing lithium hydroxide so that it can lead the EV market growth.

Switch to Renewable Energy


Livent’s Argentine operations rely (pp. 10-11) on natural gas and energy generated by natural gas and diesel. We urge these operations to switch completely to renewable sources of energy.

Report Scope 3 Emissions


We applaud Livent’s sustainability targets and comprehensive ESG reports. But it doesn’t yet track and public its scope 3 emissions. For a company that has mining and production operations across multiple countries, we need to know its indirect CO2e emissions and want to see these emissions reduced. As part of its effort to provide greater ESG transparency, we urge Livent to report their scope 3 emissions.

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