What the Looming Lithium Squeeze Means for Electric Car Batteries

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Piles of lithium carbonate-rich salt in Bolivia.

Lithium-ion batteries are everywhere — in your phone, laptop, and by this time next year, maybe your car. The technology is slated for GM’s (s GM) Chevy Volt, Toyota’s (s TMC) plug-in Prius, and electric versions of the Daimler Smart (s DAI) and BMW Mini (s BMW).

Until recently, lithium went primarily into ceramics and glass. Now batteries make up one-fifth of the world’s end-use market for the mineral — a share that will only grow if the auto industry goes where lithium-ion startups like ActaCell, A123 Systems and Imara are betting it will. But shortages could stop an emerging industry in its tracks — or dramatically reshape it — within a decade: Mitsubishi (s MMTOF) estimates that lithium demand will outstrip supply as early as 2015.

The U.S. Geological Survey’s mineral commodity specialist on lithium, Brian Jaskula, offers a more conservative estimate, forecasting that demand will begin to drive lithium prices up in the next 10 to 15 years. But the signs are clear: Lithium, which now costs less than a buck per kilogram, will not stay cheap for long.

This reality has put Bolivia’s lithium-rich salt flats in automakers’ sights. The country has more than half of the planet’s total lithium deposits in the brine beneath those plains. There’s just one hitch: The Bolivian government is none too keen on giving up its resource to foreign miners.

According to Time, Mitsubishi and Toyota (one of the only major automakers that produces its own batteries) have both broached talks about lithium development with Bolivian officials, with no luck. Lacking the infrastructure to manufacture batteries, Jaskula said, it will take Bolivia years to build out the industry it hopes will jump-start the national economy.

But politics and trade negotiations hardly tell the whole story. Enter: Innovation. In the looming lithium squeeze, battery makers whose technologies use less of the mineral could enjoy an advantage — just as thin-film solar became the hot new thing when polysilicon shortages shook the photovoltaic industry last year.

This means the Chevy Volt may be in for a redesign. As is, the Volt battery uses a relatively high load of lithium carbonate for the amount of power in its battery: 1.4 kilograms per kilowatt-hour. At current prices ($8/kg, up from $0.50 to $1.50 a few years ago), that works out to only about $180-worth of the raw material in every car. But if a supply squeeze sends lithium prices through the roof — and causes fully-loaded batteries to add more than the current $10,000 or so to a car’s total cost — lithium-heavy chemistry could be a luxury GM can’t afford.

According to Jaskula, competing designs offer the same amount of power for less than a third of the lithium. For low-margin electric vehicles like the $9,000 model recently announced by India’s Reva, rising lithium prices could be a deal breaker.

Higher lithium prices could also give the nascent U.S. battery industry a steeper climb to the top. The U.S. consumes more lithium than any other country, despite having only 760,000 tons of the world’s 13.8 million tons of identified lithium resources (those of known quantity, quality and grade), according to the U.S. Geological Survey. While most U.S. lithium imports now come from Chile and Argentina (69 and 29 percent, respectively) China has brought new supply online in the last few years. In a peak-lithium world, that could put Asia’s already-leading battery makers one more step ahead.

30 Comments

Luis

I am from bolivia and im really proud to know this since i had already known bolivia is a poor country and they can become rich is a really good feeling

save-world

@ bjd: thanks for the link. The article you linked refer to the following presentation by TRU:
http://www.trugroup.com/Lithium-Market-Conference.html

Striking to note though, that the TRU makes the assumption that all-electric vehicles will not start to take off before 2018 at best and will have a very meagre part of the market.

However, in view of the depleting oil resources, there is some potential that this assumption may not be valid. In fact, Plug-in electric vehicle may become major players sooner than that: http://goo.gl/RXDq
In this latter case, how long do we have left before peak lithium?

PLAGA

pretty much her entire article she wrote here was plagarised from a research paper by a very good group af people at duke!

Milestone: Lithium-ion Batteries to Hit the Road in Toyota’s Plug-in Prius

[…] Milestone: Lithium-ion Batteries to Hit the Road in Toyota’s Plug-in Prius Written by Josie Garthwaite No Comments Posted June 3rd, 2009 at 11:33 am in Automotive It’s been a long time coming: Toyota began working more than three years ago on lithium-ion batteries — an alternative to the NiMH batteries in the Prius that can be more expensive, but store more energy with less weight. Today the company detailed plans to lease 500 plug-in hybrids with lithium-ion batteries, including 200 in Japan, 150 in the U.S., and 150 in Europe starting at the end of this year. The company said today that the upcoming lease program, mostly for government fleets, will use models based on the third-generation Prius (pictured) that can charge via standard household outlets — and will be the first time this type of battery has been used for propulsion in a Toyota vehicle. It will also be one of the first on-road trials of this size for lithium-ion batteries in a plug-in hybrid car by a mainstream automaker — making it a major milestone for a technology that’s widely seen as the future of electric car batteries. […]

JimGeo

Nanosolar cost-competetive with coal, eh? I guess we’ll all soon be installing those panels. We can turn on the lights all day! I’m all for it, but I believe it will occur when it’s cost-competetive. Also, check the performance data on Li-ion batteries in cold weather. Great for those Hollywood stars in southern California, but not so much for the rest of us in America.

To the true believer who implies the choice in who to believe in anthropogenic global warming is Michael Crichton or climatologists (some – all firmly attached to the government grant teat). How about Richard Lindzen of MIT or Roy Spencer of NASA or any of the hundreds or thousands of scientists from all fields who recognize that as a scam. How about the head of the IPCC – a career railroad engineer. Tum tee dum.

DrumBeat: February 9, 2009 | EcoSilly

[…] way, though, as hybrid and electric vehicles take a bigger share of the market, that threatens to push up lithium prices. That would make batteries, the costliest part of electric cars, even pricier, further threatening […]

Lithium glut? Maybe, but what about after 2020? | Alternative Energy News

[…] Of course, Tahil raises other concerns, such as energy security. It doesn’t make much sense, he argues, to move away from oil and all its geopolitical risk and toward lithium, which offers up another batch of geopolitical risk. China, for example, has its own lithium reserves but it’s unlikely to share that with the west. North America gets its lithium mostly from Chile and Argentina, and while Bolivia has huge reserves, that country is beginning to behave like Venezuela. In fact, according to TIME, both Toyota and Mitsubishi have been knocking on Bolivia’s door, hoping to get in on the lithium action, but nobody is answering. Mitsubishi has said that demand of lithium will outstrip supply in less than 10 years unless new sources are found. (Hat tip to Earth2Tech) […]

Lithium glut? Maybe, but what about after 2020?

[…] Of course, Tahil raises other concerns, such as energy security. It doesn’t make much sense, he argues, to move away from oil and all its geopolitical risk and toward lithium, which offers up another batch of geopolitical risk. China, for example, has its own lithium reserves but it’s unlikely to share that with the west. North America gets its lithium mostly from Chile and Argentina, and while Bolivia has huge reserves, that country is beginning to behave like Venezuela. In fact, according to TIME, both Toyota and Mitsubishi have been knocking on Bolivia’s door, hoping to get in on the lithium action, but nobody is answering. Mitsubishi has said that demand of lithium will outstrip supply in less than 10 years unless new sources are found. (Hat tip to Earth2Tech) […]

Zero X Owner

Lithium is an energy CARRIER, not a source. Unlike oil or other liquid FUELS, which are lost to reuse forever once converted to heat and motion, lithium does not go away. It’s simply used to temporarily store energy from a whole bunch of possible sources. Lithium power packs are replaced very infrequently, from performance degradation, and can still be used for other applications indefinitely. Also, lithium is not the only energy carrier, so demand for it will vary with the economics of available mixes of many existing energy carriers.

Since this article does not understand the basic, fundamental nature of energy carriers, distinct form sources, what else does it get wrong?

Joe B.

We could extract lithium from salt water but that takes water. If only we had cheap source of power. Wait. Nanosolar thin film is cost productive with coal right now. As they increase production it will be cheaper than coal powered electricity. Perhaps we already have the technology to prevent lithium shortages. Cheap power + sea water = lithium. Why stop there. We could use it to create hydrogen and oxygen as well.

bjd

I implore you to research your facts more before posting articles like this one. Just recently, TRU group came out with their forecast for world lithium supplies. It’s not nearly bad as you indicate. In fact, the TRU group (who are the world leaders when it comes to knowing about lithium research, mining, extraction, and processing) are indicating that because of the worldwide recession, lithium demand will not outstrip supply for the foreseeable future.

Here’s the link:

http://www.transworldnews.com/NewsStory.aspx?id=73850&cat=1

Also, please follow or report on the 2009 Lithium Market and Supply symposium taking place next week down in Santiago, Chile. This is the meeting of the minds when it comes to the lithium industry. Journalists would be foolish to continue reporting on what battery makers, automakers, politicians, and nay-sayers might say about a perceived lithium shortage. This meeting of big players and analysts in the industry are the ones who will dictate lithium supply.

I liken this to the global warming discussion. Who are you going to believe, Michael Crighton; the sci-fi/thriller novelist who posited to Congress that global warming is a farce, or the climatologists who use scientific data to back up their position that global warming is real.

bjd

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