Electric vehicles

Lithium is key to EV batteries, but could face a shortage by 2023. Lilac Solutions wants to help.

The startup, which says it’s developed a much faster and more efficient way of extracting lithium, recently raised a $150 million Series B.
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Pictured: A lithium brine pool in Bolivia; source: Aizar Raldes/Getty Images

· 3 min read

Last Wednesday, BMW became the latest member of an exclusive multimillion-dollar club: It invested in Lilac Solutions, a startup trying to make lithium extraction faster and more efficient.

The German car company joined Lowercarbon Capital, T. Rowe Price, SK Materials, and others in Lilac’s $150 million Series B round.

Why it matters: Demand for lithium, which is used in batteries for smartphones, computers, and electric vehicles, has shot up as more automakers commit to moving away from gas-powered cars. Lilac has developed new ion exchange technology that it claims would speed up lithium production, though it won’t be a silver bullet for impending shortages.

Demand for the metal is expected to quadruple over the next decade, and the market could see a shortage as soon as 2023, according to BloombergNEF.

  • Mining companies literally can’t get lithium out of the ground fast enough. Manufacturers will need about 189,000 metric tons more than extractors can provide in 2025, according to Benchmark Mineral Intelligence. For context, that gap is larger than the size of the entire lithium market in 2015.

The impact? Nearly 19 million rechargeable electric cars could be lost over the next decade due to battery-cell shortages, according to a report from the Center for Automotive Research.

Lithium is found either in hard rock or saltwater deposits, and collecting it from either source has its own environmental impacts. Mining it from rocks—as they do in Australia, the world’s top producer of lithium, as of 2019—is energy intensive and expensive. Extracting the metal from brine sources is more economical, but takes much longer and requires a massive amount of water, which is threatening ecosystems in the lithium-rich countries in South America.

Enter: Lilac Solutions

Founded in 2016, Lilac says its brine extraction method takes about two hours—instead of as long as two years, the current norm—and can produce the same amount of lithium from one acre of land that the traditional process collects from 10,000 acres.

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The company uses patented ceramic beads for ion exchange, meaning the brine is filtered through these beads, which absorb the lithium in the liquid and reject other contaminants like sodium, magnesium, calcium, and boron. Then the beads are flushed with hydrochloric acid to create lithium chloride—the equivalent of “crude oil”—and from there are converted into the powder form of battery-grade lithium.

Lilac also claims to address concerns about water usage and environmental impact by returning the brine to the ground after the extraction process.
So far the company has tested its tech on multiple brine samples in its Oakland, California, lab, and has completed its first field pilot.

  • Lilac is partnering with Australian lithium developer Lake Resources to provide the technology for the Kachi Lithium Brine Project in Argentina.
  • They plan to begin production at the site using Lilac’s method by 2024.

Looking ahead: Lilac will use its Series B funds to double its headcount and build a US manufacturing facility for its ion exchange beads. The company’s vision is to be a sort of mining as a service business, partnering with developers to design, build, and operate their lithium-extraction systems.

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