COP26 and competition: regulatory trends in battery technology 

Norway – followed by Finland and Sweden – is the world’s greenest country, helped by the fact that hydropower generates over 95% of its electricity, and it has invested considerably in battery technology. In 2020 it became the first country where over 50% of new cars sold were electric. 

This was helped by eliminating sales taxes and value-added taxes on electric vehicles (EVs), reducing road tax, offering free passes on toll roads and free, preferential parking in city centres. 

The country has aggressive plans: after 2025, new private cars, city buses and light vans must have zero emissions, and by 2030 the same must apply to heavy vehicles and long-distance buses. Norway is investing heavily in creating a circular battery industry and aims to be the EU’s battery hub. 

The work of countries such as Norway will lead to increased competition in the so-called Lithium Triangle, which consists of Chile, Bolivia and Argentina. According to the US Geological Survey, the Lithium Triangle makes up 58% of known global lithium reserves. 

Due to their favourable terms for foreign finance, better geology, access to ports and a less disruptive political landscape, Argentina and Chile are far ahead in production.

Lithium extraction is a politically charged issue in the Lithium Triangle. Challenges lie ahead as each nation scrambles to reach a politically feasible solution for securing foreign investment, ensuring local groups benefit while developing more profitable downstream domestic industries such as processing or battery production. 

Lithium ion battery production in the region will require public-private partnerships. The US will likely consider funding such ventures to bring cell production closer to home, decreasing China’s dominance. Argentina could offer the largest feasible growth market for lithium extraction in the next half-decade. 

Bolivia’s Salar De Uyuni salt flat contains one of the largest reserves of lithium in the world. However, Bolivia faces technological, political and infrastructural barriers; Bolivia’s lithium is held in salt lake brines, making it difficult to extract. 

Foreign investment in technology and logistics would significantly speed up extraction. However, there is consistent public and political opposition to foreign investment and deal-making concerning its lithium.