Securing lithium upstream: a nonferrous bet tied to Toyota’s electrification (2018)

The weight of holding the raw material

At the core of this decision is the idea of securing battery materials — the linchpin of electrification — through the company’s own channel rather than buying them on the market. Salt-lake interests, added production capacity, domestic output of lithium hydroxide: this run of investments can be read as an attempt to shift the company’s centre of gravity, in step with Toyota’s electrification, from finished vehicles downstream to raw materials upstream. But resources cannot avoid the swings of the market, and the price of securing them included the loss of a writedown.

Whether the stance of holding the raw material bears fruit depends on how fast, and with which technology, electrification advances. Whether lithium-ion batteries remain the lead player, or other materials and methods rise, is hard to see at this point. The lithium upstream that Toyota Tsusho has built up since 2018 is an asset whose value is bound up with Toyota’s electrification, and its success or failure looks inseparable from where the whole group’s electrification strategy ends up.