[Martinjlm]

Originally Posted by Wyzz Kydd

I hope you're right. I understand economies of scale, but when an input to the production process is limited, economies of scale don't work as input costs rise.

My understanding is that the rare earth minerals needed are in fact 'rare' and increasingly so. Again, for the sake of consumers, I hope I'm wrong, but I don't think that's the case.

Scarcity of most minerals is a function of “is it worth the cost of extraction to go after them”. Lithium is the best example. There’s lithium in the ocean. There’s lithium in the ground in Canada. There’s lithium in a dried lake bed in Utah, there’s lithium in multiple places in several South American countries. When the demand and price are sufficient to make extracting it profitable, you’ll see operations spring up to extract. Significantly higher volumes of EVs is as much a factor as price per gram. The rare earth minerals is pretty much as you describe. The thing here is that a lot of the development processes for batteries and for motors is focused on improving energy density (batteries) and power density (motors) while simultaneously reducing the amount of rare earth minerals required per unit.

Best example is to go back to the ‘70s. The oil shortage and air quality concerns drove the need for smaller cars with smaller engines and catalytic converters. Catalytic converters required platinum and other rare earth metals. Over time, automakers improved the operating efficiency of catalytic converters while also reducing the platinum content. At the same time cars were stifled with emissions compliance equipment that choked power levels down as low as 30 hp/l. Fast forward to today and we’ve got cars that are way cleaner than the best cars back then. They use negligible amounts of platinum and consistently deliver more than 100 hp/l with some examples over 250 hp/l in vehicles that are attainable by moderately affluent people, not just the super rich.

I expect the progression of EV technology to parallel the progress made from the ‘70s to today, but with shorter generations of learning / faster clock speed. This is only the first generation of production salable EVs, leading into the second generation. The pace of progress will accelerate.