Biden Would Give Beaten-Up Lithium a Boost, Top Producer Says

The lithium market would benefit from a Joe Biden victory in U.S. presidential elections, according to the biggest producer of the key ingredient in batteries for electric vehicles.

Biden, who is tightening his hold on the race for the White House, unveiled plans to spend $2 trillion on a clean energy economy, calling for more public investment in charging infrastructure and fresh tax credits to help throttle U.S. greenhouse gas emissions driving climate change.

“There’s the incentives, and the emphasis that’s put on electrification and EVs around that,” Albemarle Corp. Chief Executive Officer Kent Masters said in a telephone interview. “The market side of it would be more favorable with Biden.”

The former vice president’s climate plan would boost electric-vehicle adoption, Goldman Sachs analyst Mark Delaney wrote in August. That would help boost demand for lithium, prices of which have slumped in the past year or so as supply expansions outpaced consumption.

Biden Would Give Beaten-Up Lithium a Boost, Top Producer Says

Better access to faster charging points may lift a historic “gating factor” for potential consumers, while a tax credit could narrow the cost gap between an EV and an internal combustion engine vehicle, according to Delaney.

A split legislative branch in the U.S., where the Senate could be controlled by Republicans, means the big incentives that a Biden presidency wants to push through may meet some hurdles. Still, U.S. corporations “probably wouldn’t have as much of a higher tax burden, regulatory burden than you would have” if the Democrats had complete control, Masters said.

“It’s probably balanced from our standpoint, but we would look for incentives in the U.S. around a green deal that would be positive for EVs,” the Albemarle CEO said.

Read More: Livent Extends Lithium Supply Pact With Tesla Through 2021

A Biden presidency could also mean less friction around trade, and a less antagonistic approach with China, which could help the lithium-ion battery supply chain a little, according to Masters. “Again we have to wait and see. I don’t think it’s obvious how that’s going to play out,” he said.

Asia dominates manufacturing of lithium-ion cells, accounting for more than 80% of existing capacity, and the majority of that might is in China.

©2020 Bloomberg L.P.

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