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Do you have any citations explaining this in more detail, perhaps with some argument supporting intent or collaboration? I ask because it directly conflicts with everything I've seen about the economics arising from the fundamental physics of chemical engineering. To whit:

The chemical engineering department at my university was full of extremely bright people working on incredibly complex machinery and wacky fluid-dynamics tricks to eke out an additional tenth of a percent yield or purity in basic chemical processes. I presume that this could only be even faintly economical if the industry is so competitive that minuscule improvements are a major advantage.

Similarly, my understanding is that putting together and running a chemical operation is an astonishingly complex and expensive proposition. Like, I wouldn't be surprised if the cost of using a tanker full of benzene is 5% the benzene itself and 95% safety measures, regulatory compliance, purpose-built equipment, and specially-trained employees.

I know for a fact that it takes decades for new chemical plants to come online, which makes the supply extremely inflexible; I'd be more surprised if new sources of demand didn't cause prices to explode.

> Do you have any citations explaining this in more detail, perhaps with some argument supporting intent or collaboration? I ask because it directly conflicts with everything I've seen about the economics arising from the fundamental physics of chemical engineering. To whit:

I do not, but I mingled a lot with EV engineers from BYD, with some of whom I used to spend Fridays.

> the cost of using a tanker full of benzene is 5% the benzene itself and 95% safety measures, regulatory compliance, purpose-built equipment, and specially-trained employees.

The cost of benzene is 50% and more tax in most Western countries.

> The chemical engineering department at my university was full of extremely bright people working on incredibly complex machinery

Indeed it is, but there are far more harder to synthesize, and work with chemicals sold at single digit margins, largely thanks to Chinese factories steamrolling chem monopolies for the last 2 decades.

And battery materials are by far not that tricky to make.

> I ask because it directly conflicts with everything I've seen about the economics arising from the fundamental physics of chemical engineering. To w[]it:

> I wouldn't be surprised if the cost of using a tanker full of benzene is 5% the benzene itself and 95% safety measures, regulatory compliance, purpose-built equipment, and specially-trained employees.

> I know for a fact that it takes decades for new chemical plants to come online, which makes the supply extremely inflexible; I'd be more surprised if new sources of demand didn't cause prices to explode.

I don't understand how you think this conflicts with the parent comment. You seem to be in near-total agreement. Compare:

>> The raw material cost of metals used even in the biggest batteries around is at maximum $1k-$1.5k, and usually just few hundred bucks.

>> What makes it expensive is the big chem, and it's stranglehold on processing them into cathode, and anode materials.

>> Plain graphite, while also being dominated by an oligopoly, still only costs $1 per kg, but the moment it becomes an industrial chemical, its price shoots n-fold.

>> Lithium is by far not the cost factor at all, with the amount used, and no scarcity prospect is in sight, despite speculations of the stock market lemmings, but the moment it is put into some chemical relevant to battery making, it too shoots up in price n-fold.

>> Cobalt was one of few things which really used to be pricey, but not much now. The cost was approaching $200 per kg at the top of the Cobalt bubble, but then it felt to $20, and below. And again, the moment it becomes a cathode material, it costs 10*n-times as much.

The parent comment claimed that prices of finished products were higher than the costs of raw materials because a "big chem" cartel has a price-fixing agreement. I disagree with this. My knowledge of the field and personal observations imply an extremely competitive market (-> viability of expensive R&D for small improvements) and a field whose basic engineering problems (-> near-zero price elasticity) would naturally yield the observed prices (-> extreme variation when new demand is found). Both of these argue against widespread anticompetitive behavior.

“What makes it expensive is the big chem, and it's stranglehold on processing them into cathode, and anode materials.”

Sand is so cheap. Why is a cpu processor so expensive?

The expensive part is when we teach sand to think!

Every battery cell itself is a little engineering miracle, that's why its expensive.

> The cost advantage of LFP batteries which a lot of Chinese companies prefer to cobalt based

This is a kind of nonsense statement. Cathodes can't really be 'cobalt based'. The Cathodes primary part is Nickel. The Cobalt is an additive to stabilize the Nickel.

Precisely correct. No idea why this was downvoted.

> What makes it expensive is the big chem, and it's stranglehold on processing them into cathode, and anode materials.

Could you expand on this?

Processed chemicals used for battery making cost many times the cost of raw materials, and it will be so until competition can weaken the big chem oligopolies currently dominating the market.

That’s completely misunderstanding why the cost increased. 95% pure carbon is worth next to nothing per pound. 99.99+% carbon is really difficult to manufacture. If battery manufacturers thought they could do it for less they would manufacture things in house, but purification is both difficult and expensive.

If it is so easy[0] go start a company and undercut them. Raw materials are commodities, if you can make battery grade materials for less - in bulk - someone will buy them (or buy you out to protect their monopoly).

[0]its not. Batteries have exacting purity and qc requirements that meeting and maintaining is neither trivial nor cheap to do well even at small scale.

What sort of processing are they doing? It seems like processing those materials to be pure and consistent could be pricey. Maybe not a perfect comparison, but raw silicon costs $1-2 per kg, but can cost several hundred per kg once processed into wafers.

How come this soup cost $5 per cup when it cost them $0.1 to make?! Of course making soup is fairly easy compared to highly pure chemicals

Because that calculation assumes the existence of a kitchen to make the soup, energy to heat the soup etc. If you ignore what the actual costs of production are it seems like everyone is using an extreme markup.

Are you sure it isn’t, at least partly, due to intrinsic costs of turning raw materials into usable materials?

Silicon as a raw material is dirt cheap, too, but removing impurities so that it can be used makes it a lot more expensive.

Raw material cost has usually very little to do with what a similar weight or volume of purified material costs. The purification process, energy input and any kind of stabilization trickery required to keep it pure are what drives the cost, the raw material costs are a footnote in that.