David Sacks, co-founder and partner of venture capital firm Craft Ventures, recently commented in his tweet, “If this year proves anything, it’s that there can be no security without energy independence,” to which Tesla CEO Elon Musk replied: “Lithium batteries are the new oil”.
Sacks’ tweet is referring to the petroleum crisis resulting from Russia’s invasion in Ukraine, since petroleum is still the most widely used energy in the world. Statistics show that the US is consuming approximately 20 million barrels of petroleum each day, including roughly 8 million barrels of imported petroleum, and about 2/3 of the volume would eventually enter fuel tanks. Gas prices in the US have been continuously surging since the outbreak of the Russia-Ukraine war.
The US announced on July 13th that the CPI for June saw a YoY increase of 9.1%, and has arrived at an all-time high over the past 40 years, where the main factor goes to energy prices that saw a MoM and YoY increment of 7.5% and 41.6%, of which petroleum prices had a MoM and YoY increase of 10.4% and 60.6%.
The public is only becoming more interested towards EVs amidst the incessantly surging oil prices. Musk commented that EV alone is unable to resolve the issue of energy independence since it only switches from petroleum to battery, and that lithium batteries are primarily produced in Asia. Domestic US production is a necessary condition in attaining self-sufficiency for lithium batteries, and the source of batteries must also be confirmed at the same time. Major excavation of lithium mines is currently happening in South America and Australia.
Despite the popularity of lithium batteries, the world is still dependent on petroleum, and EVs are still largely regarded as a luxury product. Musk’s statement will verify itself one day as the world is currently undergoing transformation, where countries strive to achieve their green initiatives by gradually eliminating fuel-consuming vehicles and adopting EVs.
(Cover photo source: Flickr/Steve Jurvetson CC BY 2.0)