On Friday, General Motors Co. (GM, Financial) announced a new partnership and investment in California-based Controlled Thermal Resources Ltd. (CTR), a company specializing in sustainable lithium extraction. With the new partnership, GM is looking to secure adequate resources for batteries that will be used to power their electric vehicles.
According to the press release from CTR, GM is planning to source a “significant portion” of its future battery-grade lithium hydroxide and carbonate needs from CTR’s Hell’s Kitchen Lithium and Power development. The development location seeks to draw lithium from the Salton Sea Geothermal Field at the southern tip of California. The location contains one of the largest known lithium brine resources in North America.
“We are very pleased to establish this strategic relationship with GM moving forward,” CTR CEO Rod Colwell said. “GM has shown great initiative and a real forward-thinking strategy by securing and localizing a lithium supply chain while also considering the most effective methods to minimize environmental impacts.”
CTR uses renewable power and steam to power its direct lithium extraction process. This allows the company to minimize both its physical and carbon footprint. Alongside its sustainability efforts, CTR has claimed to reduce the production time of lithium significantly. GM will see the direct benefit of decreased production times and a shortened supply chain as they ramp up their electric vehicle production over the next decade.
CTR is expecting to start delivery from their first-stage production facilities in 2024 and believes they will be critical to developing a sustainable battery chain in the United States.
On July 2, GM stock was trading at $58.75 per share with a market cap of $85.27 billion. According to the GF Value Line, the stock is trading at a significantly overvalued rating.
On the other end of the battery ecosystem, another company is looking to capitalize on the ever-increasing need for battery materials. Li-Cycle, a Canadian lithium-ion battery recycler, is expected to go public in the next few weeks upon the completion of its merger with Peridot Acqusition Corp. (PDOT, Financial). The company looks to gain approximately $300 million in funding directly from a reverse merger with Peridot according to a report from Investing.com.
In its short five years of operation, Li-Cycle has launched several pilot and commercial “spokes” with an estimated processing ability of around 10,000 tons of lithium-ion batteries per year. The company already boasts a 95% recycling efficiency rate, compared to the estimated 50% industry standard, which drastically decreases the amount of solid waste from batteries.
Li-Cycle is set to benefit enormously from the increasing demand for lithium to power batteries as electric vehicles gain traction around the world. It plans to put a total of 20 processing plants into production by 2025 with a processing “hub” located in Rochester, New York that can handle 60,000 tons of raw battery materials per year.
The company's play on battery recycling targets a worldwide demand for increasing sustainability efforts. The tens of thousands of tons of battery materials it plans to process should make a sizable dent in the need to mine for new materials and help to offset the negative impacts seen from mining which should attract the attention of manufacturers and goverments alike. Should Li-Cycle's transition to the public market go smoothly and its big plans come to fruition, it could become a dominant force in the battery ecosystem and offer investors a unique opportunity to capitalize on the EV revolution.
