500,000 Electric Cars Would Take 10% of World Lithium. Only.

Sep 2, 2009

Getting 500,000 electric cars on the world's roads by 2015 – 1 percent of all the autos produced today – would gobble 10 percent of the planet's current lithium production.

That's more than enough lithium to meet expected demand, say researchers at consulting firm Gerson Lehrman Group (GLG), who recently released the fear-allaying figures, which were based on what was mined in 2008.

In fact, the world

"could potentially meet demand for up to 2 million lithium-ion battery powered HEV [hybrid-electric vehicles] and EV vehicles in that same period," GLG said.

GLG crunched the numbers following Nissan's announcement that the 24kWh battery pack in its coming zero-emission, all-electric LEAF – unveiled on August 2 – would contain 4 kilograms of lithium.

Prior to the announcement, the automaker (along with just about every other electric-auto outfit) had been hush-hush on the projected lithium footprint of its coming electric fleet. The silence led some analysts to question whether there would be enough of the vital battery material to support a near-term electric car boom.

Nissan's disclosure finally provides a window into what carmakers are actually planning. According to GLG, if the average electric vehicle has a similar 24kWh battery – and if car demand gets to a half a million – then lithium demand would reach around 2,000 metric tons. Current production is at 20,000 metric tons per year.

Electric car enthusiasts around the world surely breathed a sighed a relief from the news. But it came amid a flurry of negative media reports suggesting a shortage of other key elements could imperil the global electric car future.

Most affected by a potential supply crunch would be neodymium, Reuters reports. The little-known element is used to make magnets for electric motors in hybrid cars. Other rare elements that analysts worry about include terbium and dysprosium. Both are used to maintain neodymium's magnetic properties. Anthanum, another scarce material, is a key ingredient in the batteries of hybrid cars.

The worries were exacerbated by recent declarations by China that it will be limiting exports of these "rare earths." China is the world's dominant producer of rare earth minerals, accounting for 93 percent of global production. But not of lithium. And that's probably a good thing.

The new breed of lithium ion-battery is set to become the standard in plug-in and electric vehicles. Any kind of looming lithium supply crunch – or fear of one – could crunch the electric car before it rolls off the assembly line.

Currently, Chile dominates global lithium production. Australia is second. Bolivia houses some of the world's most untapped reserves. The numbers are staggering: The nation is believed to have 50 percent of the world's lithium deposits, with about 5.4 million tons. It is expected to become the world's top supplier.

China is not without its own lithium resources. GLG noted that its scenario excludes the additional capacity coming out of Tibet and the province of Qinghai. In fact, the nation's ramp-up of production there should add a further 10,000 metric tons in total lithium capacity by the early 2010s, assuming it doesn't tighten its grips on these exports, too.

There are new companies, as well, such as Australia's Galaxy Resources and Western Lithium Canada, which are now getting into the lithium game, GLG said.

And the potential for using recyclable material is also promising. It could reach thousands of tons per year.

The bottom line: The situation for lithium is favorable – so much so, suggests GLG, that

"Oversupply might be a more pressing question than lithium availability."

"In the mid-term, questions on lithium supply need not be asked; instead it may well be a case of who can supply lithium the cheapest and currently that ball rests firmly in the established brine producers court - competition in the lithium market may be about to hot up!"

Whether the world can avert a possible "rare earths" supply crunch is another story.

 

See also:

Tibet, Land of Lithium

Nissan Scores $200 Million for Biggest-Ever Electric Car Grid Project

Surprise: Nissan's Electric Cars to Be Made in the USA

Deutsche Bank: Electric Cars Could Wipe Gas Cars off the Map

McKinsey: World Could Cut Auto Emissions in Half by 2030

 

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