Electric cars: Australia’s bid to challenge China in production of battery compound stumbles as lithium plant delayed

Australia’s ambition to ease China’s stranglehold on production of a key battery compound has hit further hurdles after Wesfarmers said its lithium refinery would be delayed by six months.

The start of the plant in Western Australia, which seeks to produce enough lithium hydroxide for a million electric vehicles a year, has been pushed back to the first half of 2025, the mining and retail conglomerate said on Wednesday.

Tensions with China have prompted the US and Europe to look for alternative supplies of the compounds critical to the decarbonisation of transport, with Australia’s status as the world’s biggest lithium miner making it a promising alternative processing hub. Those ambitions have been boosted by President Joe Biden’s Inflation Reduction Act, which grants tax credits on EVs that are built with materials produced by allies.