Prime Minister Scott Morrison’s 2019 comments that characterized EVs as a threat to Australians’ way of life seem to have set the tone for Australia’s hands-off EV policy ever since—the market share of EVs in the country remains below 1.0 percent. (This may be changing—New South Wales, Australia’s most populous state, recently announced a new EV policy package that includes $500 million worth of incentives and infrastructure investment.)
In any case, Tesla has numerous Australian connections. In 2017, when the country went through an energy crisis, Elon Musk’s quick response to the situation made international headlines, and Tesla’s Powerwall and Powerpack energy storage products have now become important parts of the local energy ecosystem.
Robyn Denholm, the current Chair of Tesla’s Board of Directors, comes from New South Wales. Speaking at a recent mineral industry conference, she pointed out an ironic situation: Australia, which is widely considered an EV and renewable-energy laggard (and is also a major exporter of coal), nonetheless produces three quarters of the lithium, and one third of the nickel, used in Tesla’s electric cars.
“As an Australian it gives me real pride to know that the vehicles and batteries Tesla makes start [from local materials],” said Ms. Denholm. “All up, there’s about $5,000 worth of minerals and metals in every electric vehicle, and Australia is capable of supplying almost all of it. Australia is the only country in the world with resources in all three of the critical battery metals as well as other minerals required for the clean energy transition.”
Australia was the world’s largest supplier of lithium in 2020, exporting an estimated 40,000 tons of spodumene (lithium ore). However, none of this was refined product suitable for battery cells—most was shipped to China and the US to be refined and processed for manufacturing. Australia’s lithium ore sold for a measly $100 million, but Denholm estimated that, if it were processed in Australia, the value would have been as much as $1.7 billion.
Above: A look at the race around the world, including Australia, to mine electric vehicle battery materials like lithium (YouTube: Wall Street Journal)
Australia needs to prioritize lithium refining in order to seize “a $1.6-billion annual opportunity and growing,” says Denholm. Moving refining from China to Australia could also deliver enormous emissions reductions. “Mining processes currently account for about half the carbon footprint of a battery cell, and the best way to reduce the carbon footprint of minerals is to stop shipping them between 6,000 and 9,000 kilometers of ocean before refining them.”
The winds of change are blowing Down Under, as elsewhere, and Denholm sees no reason for her native land to miss out on the clean-energy boom. “There is a global transition to sustainable energy underway, and this presents a huge opportunity for Australia. Australia has the potential for some of the lowest emissions resources in the world.”
Denholm noted that Tesla expects to be spending $1 billion dollars per year on Australian minerals soon, and that by 2030, the value of the global lithium-ion battery market is forecast to be $400 billion. “That’s eight times the revenue generated by Australia’s coal exports in 2020,” she said. “The opportunity for Australia is extraordinary and now is the time to seize it.”