Benzinga | Dec 2, 2021 12:12AM EST

Lithium Suppliers Say EV Makers Need To Be 'Very Thoughtful' About Business Plans Over Next Few Years And Work Closely With Them

Electric automakers seeking batteries with longer range should work closely with lithium producers to ensure guaranteed supply of a specialised white metal, executives from Albemarle Corp (NYSE:ALB) and Livent Corp (NYSE:LTHM) told Reuters.

What Happened: The steps include signing long-term contracts and sharing development plans early on with lithium producers as the initiative requires extensive planning and investment.

Batteries that run longer before requiring a recharge are currently made with a certain type of lithium that cannot be stored for long periods and are made only in custom batches.

"The demand side of the equation has to be very thoughtful about what its business plans are over the next three or four years," Livent CEO Paul Graves said.

"We need certain economics to be able to continue to grow," added Albemarle lithium division head Eric Norris.

See Also: BofA Bullish On EV Battery Value Chain, But Not US-Listed Lithium Stocks

Both Norris and Graves were speaking at the Reuters Next panel on Wednesday and pointing out the importance of coordination between automakers and the suppliers.

Why It Matters: The global demand for lithium is expected to jump to one million tonnes by 2025 and three million tonnes by the end of the decade as more and more legacy automakers switch to electric vehicles.

Tesla Inc (NASDAQ:TSLA) is currently leading the electric vehicle pack and a host of legacy rivals including General Motors Co (NYSE:GM), Ford Motor Co (NYSE:F) are now rushing to make up for the lost time.

See Also: What To Know About The Lithium-Ion Battery Supply Shortage

Chinese electric vehicle upstarts such as Nio Inc (NYSE:NIO) and Li Auto (NASDAQ:LI) have already launched their electric vehicles and are setting up grand plans to ramp up capacity globally.

Price Action: Albemarle shares closed 2.49% lower at $259.85 a share on Wednesday. Livent shares closed 5.91% lower at $28.50 a share.