Enough lithium for hybrid boom? Most say yes

Don't worry about lithium supplies needed to make the batteries for all those hybrids and electric vehicles on the way. There's oodles of the stuff--at least for the next decade. Beyond that, though, opinions differ.

The supply of lithium has been a topic of debate since automakers first set their sights on lithium ion batteries. Those batteries are seen as the key to making a practical electric car because they are lighter and more powerful than the nickel-metal hydride batteries used in today's hybrids.

They are still costly. And because the lithium ion batteries remain an emerging technology, questions linger about their life span, durability, and safety. But for now, lithium ion batteries remain the most likely energy source for electric vehicles.

Locating lithium

Source: Meridian International Research, 2005 levels

Watching supply, price

General Motors Co., Toyota Motor Corp., Mitsubishi Motors Corp., Nissan Motor Co. and Daimler AG are among the automakers that plan to launch electric or plug-in hybrid vehicles by 2011. All plan to use lithium ion batteries. All, therefore, closely monitor the supply and price of lithium.

As demand for lithium ion batteries for laptops, cell phones, and now vehicles soared, prices of lithium carbonate, a raw material used to produce lithium, rose to $5,500 a ton in 2008 from $2,000 in 2004, says Roskill Information Services, a metals and minerals research consulting firm. The jump came despite rising global output.

As prices climbed, analysts began studying the outlook for lithium. The question: Much as today's drivers are hostage to scarce, increasingly costly oil, will tomorrow's drivers be reliant on scarce, increasingly costly lithium?

Some of those studies, along with executives at battery companies, say worries about scarcity are overblown. They say the world has plenty of lithium to power electric and plug-in hybrid vehicles, in addition to consumer electronics.

Gerson Lehrman Group, a New York consulting firm, estimates that even if 500,000 cars powered by lithium ion batteries were produced in 2015, they would use less than 10 percent of last year's global lithium output.

The calculation was based on a report that Nissan's upcoming Leaf electric vehicle uses about 8.8 pounds of lithium in its battery pack. At the 2008 price cited above, the small amount of lithium needed for each car would come to $24--just a fraction of the total cost of an electric vehicle's battery, which can run as high as $10,000.

Gerson Lehrman says: "Oversupply might be a more pressing question than lithium availability."

"Abundant"

Chris Richter, an auto analyst with CLSA Asia-Pacific Markets in Tokyo, puts it another way. "Lithium is one of the more abundant elements in the Earth's crust," he says. "Of all the various problems with this technology, running out of lithium is not one of them."

Neil Maguire, vice president of business development at Imara Corp., a lithium ion battery startup in Menlo Park, Calif., says supply is sufficient to meet near-term demand. Beyond that, if the volume of electric vehicles soars so much that lithium supplies become an issue, older lithium ion batteries can be recycled for the raw materials in them, he says.

"We don't worry about lithium availability," Maguire says.

Mining companies are racing to boost lithium output and find new sources.

Global lithium production reached 22,800 tons in 2008, up from 13,000 tons in 2000, according to Roskill Information Services.

Adding capacity in China or tapping lithium reserves in new countries could add 10,000 tons of output by the early 2010s, Gerson Lehrman forecasts.

Trouble with lithium?

But a 2008 report titled "The Trouble with Lithium 2," by Meridian International Research, a renewable-energy think tank in France, concluded that the world faces a shortage when vehicle demand is added to considerable consumer electronics demand.

"Realistic lithium production increases have no prospect of also meeting the demands of the entire product and propulsion revolution in the global automotive industry in the next decade," the report said.

Estimates of global reserves vary. Meridian puts it at 4 million tons, far below the 20 million tons cited by some sources. The trick is finding deposits of high-quality lithium that are economically viable to extract.

Car batteries require about 100 times the amount of lithium used in a laptop computer battery, putting a strain on global deposits, says William Tahil, author of the Meridian report.

He concedes that increased lithium production can keep pace with electric-vehicle production in the low millions of units a year. But looking further into the future, Tahil says, there is not enough for a wholesale conversion of the entire world's auto industry from internal-combustion engines to battery-powered electric motors.

"There's enough for a niche market," Tahil says, "but nothing close to enough for the mass market."

(Source: Automotive News)