- [Narrator] When it comes

to electric vehicle manufacturing,

few resources are as vital as lithium.

Over the past decade,

prospectors unearthed troves of the lithium chemicals

that power batteries,

but the shift toward a cleaner economy is accelerating

and batteries play a central role.

As a result, demand for lithium

is expected to exceed supply through 2025.

Car makers and analysts say that more lithium is needed

to produce more batteries at a faster pace.

And as China takes a leading role

in the battery supply chain,

the US government is trying

to boost domestic supply of the metal.

Here's how Lithium became such a hot commodity.

Lithium is scattered not only across the US

but the entire world.

In the top lithium producing country, Australia,

miners excavate a mineral called spodumene,

which contains the metal.

And in Chile and Argentina,

companies extract lithium from massive salt lakes

by pumping water into the ground.

The extracted metals are mixed with other elements

to produce compounds, like lithium hydroxide

and lithium carbonate.

These compounds are a key part of many batteries.

Car makers and battery researchers, like Dr. Guihua Yu

value Lithium because of its unique chemical properties.

- With lithium ions being so small,

they can be very easily recharged, as they diffuse quickly

during battery charge and discharge.

Lithium ions are also very light weight,

so batteries based on Lithium ions can offer high energy

meaning that a lot of energy can be packed

in a small amount or small volume of materials.

- [Narrator] These two properties,

energy density and rechargeability

are the reason why lithium is found in so many batteries.

Inside of all batteries are two major components,

the cathode and the anode,

compounds that contain lithium ions

transfer from one components when power is drawn down

and they return when the battery is recharging

- [Guihau Yu] And they can be charged

like hundreds or thousands of times

so they have different kind of degradation mechanism.

But lithium ions are so small, so they are very stable.

So that's the reason why the lithium ions

can offer at least a few years of use.

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- [Narrator] Scientists have spent decades

perfecting lithium based batteries.

Lithium was discovered in 1817,

but more than a century passed

before businesses used the chemical

in mainstream batteries.

In the 1990s, Sony took advantage

of new, lightweight lithium ion batteries

in a design for a hand-held video camera.

The result was the Handycam.

A smash commercial hit.

Shortly afterward, rechargeable batteries

began to appear in laptops and smartphones.

And batteries are increasingly used

in conjunction with wind and solar power.

Analysts like Simon Moores point out

that demand for the chemical is growing

as companies build bigger, battery-powered machines.

- People need more lithium today,

and in the future than in the past,

because you're going from lithium ion batteries

the size of your mobile phone

to lithium ion batteries the size of your car.

The entire chasse of an electric vehicle

is a lithium ion battery.

So there's an order of magnitude bigger,

and as a result

you need an order of magnitude more lithium supply.

- [Narrator] Which means that mining companies

around the world are searching for lithium.

In the United States,

companies like Lithium Americas and Piedmont Lithium

are looking for metal-bearing spodumene minerals

in familiar places.

In the past,

lithium from the tin-spodumene belt of the Carolinas

was used in the production of both medication,

and nuclear weapons.

Today prospectors are fanning out

in search of new deposits here,

as well as in Arkansas, Nevada, and California.

The search is based on expectations of consumer demand

for electric vehicles.

- It takes 4 to 7 years to build a lithium mine,

it takes 24 months to build a battery plant.

These two parts of the supply chain,

they don't live in the same time zones.

And that is the major challenge,

is matching the supply when the demand is needed,

and at present, the industry has really failed to date.

- [Narrator] Even though E.V. sales

currently make up about 2% of the U.S. auto market,

that share is expected to grow to 10% by 2025,

according to Morgan Stanley.

And policies coming out of Washington

could further boost demand for battery components.

President Biden ordered a review

of domestic supply chains for critical products.

That includes semiconductors, key minerals,

pharmaceuticals, and,

- Advanced batteries

like the ones used in electric vehicles.

There's strong bipartisan support

for fast reviews of these four areas

because they're essential to protecting and strengthening

American competitiveness.

- [Narrator] President Biden's emphasis

on supply chain is driven in part by geopolitics.

When it comes to lithium, only about 1% of global output

is both mined and processed in the U.S.

China unearths about 10%.

China also processes about two thirds

of the worlds lithium supply,

and dominates the global battery market.

The U.S. government has said

that relying on oversea sources

for these materials creates a strategic vulnerability,

which means that a new hunt for lithium

is only getting started.

The race is on to see who will supply the world,

with this powerful metal.

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