Chrysler parent Stellantis plans to get a substantial amount of the lithium needed for its electric vehicle batteries from a former tourist mecca in California.
The automaker announced a deal Thursday with Controlled Thermal Resources, which has offices in California and Australia, to supply “battery grade lithium hydroxide” for use in EV production in North America. That means Stellantis, which also controls the Jeep, Ram, Dodge, Fiat, Alfa Romeo and Maserati brands, will join General Motors, which announced a similar agreement last year, in tapping Controlled Thermal’s expected lithium production in the Salton Sea Basin, an area near the U.S. border with Mexico.
The Salton Sea, which was created in 1905 by an accidental outflow from the Colorado River, once attracted large numbers of visitors. Pollution and high levels of salinity, however, eventually helped end its status as a major tourist destination, according to California.com.
More recently, the area has made headlines for its potential to supply significant quantities of lithium, a key material used in EV batteries.
Controlled Thermal’s “Hell’s Kitchen Project,” which is located in California’s Imperial County, would recover lithium from underground in a process said to be more environmentally sustainable than other types of lithium production, which use evaporation ponds and open pit mines. The process would be paired with geothermal production of electricity. Power generation is expected to begin in 2023, with lithium production beginning in 2024, according to the company.
The news on the Stellantis deal prompted a mention from President Joe Biden in a statement, which said the arrangement “sets the U.S. on a path to being a leading producer of sustainably sourced, low carbon lithium.”
Finding more sustainable methods for securing lithium and other battery materials is becoming a focus for automakers. In September, Ford and Redwood Materials, which is run by Tesla co-founder J.B. Straubel, announced a deal on battery recycling that would also help improve Ford’s battery supply chain.
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Stellantis CEO Carlos Tavares said that bolstering the EV supply chain to meet his company’s goals is crucial.
“Ensuring we have a robust, competitive, and low-carbon lithium supply from various partners around the world will enable us to meet our aggressive electric vehicle production plans in a responsible manner,” Tavares said in a news release.
Controlled Thermal CEO Rod Colwell also cheered the deal.
“Securing clean lithium produced with energy from a renewable resource helps to further decarbonize the battery supply chain, which, in turn, delivers cleaner cars with less environmental impact. We look forward to a strong and successful relationship with Stellantis.”
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The deal with Stellantis is a 10-year agreement to supply 25,000 metric tons of lithium hydroxide, but financial details are not being disclosed, according to Shawn Morgan, a Stellantis spokeswoman.
The deal “does not complete our global supply needs. It covers a significant portion of our North American needs. We still have more sourcing to do to reach our global capacity needs,” Morgan said.
The automaker said it has a similar production deal to supply its European operations. The Stellantis Dare Forward 2030 business plan, announced in March, envisions annual global sales of 5 million battery electric vehicles by 2030. Additionally, the automaker is aiming for all of its passenger car sales in Europe and half of its passenger car and light-duty truck sales in North America to be battery electric vehicles by the end of the decade.
The automaker has also announced plans to build EV battery plants in Windsor, Ontario, and Kokomo, Indiana, to supply its North American vehicle production. On Thursday, the automaker and South Korea’s LG Energy Solution, its partner on the Windsor project, announced NextStar Energy Inc. as the name of their battery joint venture company, with Danies Lee as CEO. Lee “has held a series of global and regional sales and marketing roles for the promotion of lithium-ion batteries at LG Chem since 2001,” according to a news release.
Free Press staff writers Phoebe Wall Howard and Todd Spangler contributed to this report.
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Become a subscriber.