Elon Musk completely disrupted the automotive industry.
With Tesla (TSLA) – Get Tesla Inc. Report, the manufacturer of premium electric vehicles, the richest man in the world has caused a real green revolution in the automobile industry marked by promises from almost all car manufacturers to produce less polluting vehicles in the current decade. Offering more electric models has become the watchword of (GM) – Get General Motors Company ReportFord (F) – Get Ford Motor Company ReportVolkswagen (VLKAF) Nissan (NSANF) Hyundai (HYMLF) Stellantis (STLA) – Get Stellantis NV Reportparent company of Fiat Chrysler, and even luxury brands like Ferrari (RACE) – Get Ferrari NV Report.
This revolution that is underway has just taken on its full importance with the recent surge in oil prices and their corollary, which is higher gas prices at the pump. This new situation leads rich countries like the United States and the European Union to turn again to Saudi Arabia, the leading exporter of oil, to beg it to produce more oil in order to reduce the impact on consumers already affected by inflation at levels not seen for several decades. The highlight of President Joe Biden’s recent tour of the Middle East was his visit to the kingdom as the midterm elections approach.
Gas Used as a Weapon
But when he was running against former president Donald Trump, Biden had promised to treat Saudi Arabia as a “pariah”, in particular because of the 2018 assassination of journalist and critic of the Saudi regime Jamal Khashoggi. Once elected, he had declassified a damning report on the responsibility of Saudi Crown Prince Mohammed Bin Salman in this murder.
The European Union is on its side confronted with the Russian nightmare after Moscow invaded Ukraine on Feb. 24. The EU has taken sanctions against Russia but it finds itself trapped: Russia supplies the EU with 40% of the natural gas it imports. Russian president Vladimir Putin has taken advantage of the hold this gives him over European countries.
Putin has demanded that the “unfriendly” nations of Europe pay for their gas in rubles, to help him prop up the value of that currency. Poland, Bulgaria and Finland refused to do so, and Russia cut off their supplies. The EU said it viewed Russia’s action as a form of blackmail.
In March, the EU pledged to cut its gas imports from Russia by two-thirds within a year. However, it has been difficult to get agreement on other measures, such as an outright ban on imports. Germany, Europe’s largest economy, depends on Russia for nearly half of its gas supply.
Many European nations could see their oil supplies squeezed by the ban on Russian imports. In November, Lithuania and Finland got around 80% of their oil from Russia.
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It is in this context that a discussion took place on Twitter between the famous entrepreneur and investor in companies and tech startups David Sacks and Musk. It was Sacks who started by posting a message summarizing the year on geopolitics. This message was followed by another of the same order commenting on a Wall Street Journal article according to which Russia intended to use its gas as a weapon against European harvested.
‘Lithium Batteries Are the New Oil’
“If this year proves anything, it’s that there can be no security without energy independence,” Sacks wrote on July 13. “In particular, the Europeans have learned the hard way.”
That’s when Musk stepped in.
“Absolutely,” the tech titan agreed. Then he added: “And lithium batteries are the new oil.”
Batteries are ubiquitous in our phones, laptops and cars. Lithium-ion batteries have been the dominant storage technology for years, and demand is expected to increase tenfold over the next decade.
The advantages of the lithium-ion batteries are their very high energy density and their high specific energy. In addition, this type of battery is not affected by the memory effect and its self-discharge is reduced.
Lithium batteries are popular because they are easy to use, relatively inexpensive, and can be used on most appliances and gadgets. Experts say they are the best current solutions for supplying electricity to mobile devices (camera, mobile phone) or vehicles (hybrid car, electric car). They don’t need maintenance.
Lithium batteries can charge and discharge quickly, according to the same experts. They are lightweight and they have a lower-environmental impact than disposable batteries.
Asia dominates the consumer battery market, with more than 90% of production taking place in China, Korea and Japan. The Japanese group Panasonic, South Korea’s LG and Samsung and the Chinese groups CATL, BYD and Grepow are the main manufacturers of lithium batteries. Tesla is the only non-Asian company to slip between these Asian giants.