Filed under: Hybrids/Alternative, Green, Autoline on Autoblog
Autoline on Autoblog with John McElroy
THE DOWN SIDE TO LITHIUM BATTERIES
Uh-oh. In the pell-mell race to develop lithium-ion batteries for plug-ins, EV's and hybrids, has any automaker taken a hard look at where all that lithium is going to come from? Guess what? Not only are global lithium supplies pretty tight, prices are about to skyrocket.
Today, the United States imports almost all of its lithium. We get most of it from Chile, then Argentina, and a little bit from Canada and Zimbabwe. The only producer in America is actually a German company, Metallgesellschaft, which has a mine in Nevada. Yet, even though we import most of our lithium, the United States is the world's largest processor of the material.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
But a lot of others want to get in on the game. China, no surprise, is emerging as a major player. It's buying all the lithium it can from Australia. China does have some lithium sources of its own, but they're mainly in Tibet. (Say! Do you think that's another reason why they're so hard-core about keeping Tibet within the People's Republic?)
Right now, all lithium producers around the world are running flat out, and plans are afoot to ramp up production dramatically. But while there's a lot of lithium in planet Earth, I'm told that it's kind of like oil shale: it's there, but it's not cheap or easy to get.
And there are other competing demands for using lithium, like in producing ceramic, glass and aluminum. And for air conditioning systems. It's even used by the pharmaceutical industry for treating depression. Now the auto industry wants to start using huge amounts of it.
"Demand will soon outstrip supply. We're going to see prices spike," Christian M. Lastoskie, Ph.D., of the Department of Civil & Environmental Engineering, at the University of Michigan, tells me.
You'd think that such a valuable material would get recycled a lot, but that's not the case. Today, only 3% to 4% is recycled, and while that will probably increase, it won't increase a lot. Recycling lithium takes a lot of energy, so much so that recycled lithium costs five to six times more than getting it from virgin material.
That could prompt battery researchers to search out other alternatives for advanced batteries, but so far not much has happened. "Everyone searching for alternatives keeps coming back to lithium because it offers so many advantages in weight and storage capacity," says Lastoskie.
It sure looks like the auto industry is locking itself into a future that depends on a precious resource, which is in tight supply, and that has to be imported. I'm just asking folks, but in our rush to get better fuel economy are we about to replace one form of dependency for another?
Autoline Detroit
Airs every Sunday at 10:30AM on Detroit Public Television.
Autoline Detroit Podcast
Click here to subscribe in iTunes
Last week's show: "Sign 'O the Times - Part One "
Uh-oh. In the pell-mell race to develop lithium-ion batteries for plug-ins, EV's and hybrids, has any automaker taken a hard look at where all that lithium is going to come from? Guess what? Not only are global lithium supplies pretty tight, prices are about to skyrocket.Today, the United States imports almost all of its lithium. We get most of it from Chile, then Argentina, and a little bit from Canada and Zimbabwe. The only producer in America is actually a German company, Metallgesellschaft, which has a mine in Nevada. Yet, even though we import most of our lithium, the United States is the world's largest processor of the material.
John McElroy is host of the TV program "Autoline Detroit". Every week he brings his unique insights as an auto industry insider to Autoblog readers. Follow the jump to continue reading this week's editorial.
But a lot of others want to get in on the game. China, no surprise, is emerging as a major player. It's buying all the lithium it can from Australia. China does have some lithium sources of its own, but they're mainly in Tibet. (Say! Do you think that's another reason why they're so hard-core about keeping Tibet within the People's Republic?)
Right now, all lithium producers around the world are running flat out, and plans are afoot to ramp up production dramatically. But while there's a lot of lithium in planet Earth, I'm told that it's kind of like oil shale: it's there, but it's not cheap or easy to get.
And there are other competing demands for using lithium, like in producing ceramic, glass and aluminum. And for air conditioning systems. It's even used by the pharmaceutical industry for treating depression. Now the auto industry wants to start using huge amounts of it.
"Demand will soon outstrip supply. We're going to see prices spike," Christian M. Lastoskie, Ph.D., of the Department of Civil & Environmental Engineering, at the University of Michigan, tells me.
You'd think that such a valuable material would get recycled a lot, but that's not the case. Today, only 3% to 4% is recycled, and while that will probably increase, it won't increase a lot. Recycling lithium takes a lot of energy, so much so that recycled lithium costs five to six times more than getting it from virgin material.
That could prompt battery researchers to search out other alternatives for advanced batteries, but so far not much has happened. "Everyone searching for alternatives keeps coming back to lithium because it offers so many advantages in weight and storage capacity," says Lastoskie.
It sure looks like the auto industry is locking itself into a future that depends on a precious resource, which is in tight supply, and that has to be imported. I'm just asking folks, but in our rush to get better fuel economy are we about to replace one form of dependency for another?
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Autoline Detroit
Airs every Sunday at 10:30AM on Detroit Public Television.
Autoline Detroit Podcast
Click here to subscribe in iTunes
Last week's show: "Sign 'O the Times - Part One "
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Reader Comments (Page 1 of 2)
jcar302 12:39PM (8/24/2008)
First speculators drive up oil prices, and now they are going to drive up lithium prices.
Reply
RWD fan 1:43PM (8/24/2008)
Evil "speculators" are the root of all our woes, isn't that right.
If you've ever purchased anything with the intention of it having an expected value later, than you're an evil speculator too. Have a 401K? Own a home? Classic car? Mutual fund?
Guess what, you are evil too. It's called capitalism, and speculation is literally what makes the markets work.
The falling value of the dollar, along with steadily growing dependence on foreign oil are what drove the price up, not some evil 80's stereotypical Michael Douglass Wall Street type.
Bruno 2:10PM (8/24/2008)
Let me guess. You don't have a pot to whizz in, and you're jealous of those who have saved instead of spent so that they have money to invest.
I agree with the other poster. It's called capitalism. And it's why you're not typing your drivel on a computer with the capability of a 1982 Atari.
Some things in life are scarce. When you suddenly require more of something, the price goes up. Fact of life. Grow up and deal with it.
If you force suppliers to keep prices steady, we get.....NOTHING...becuase you just killed their incentive to go invest to find and extract it. All "speculators" are doing is taking the risk of buying it now at a slight premium.
If you're so worried, why not buy some lithium futures or stock in producing companies yourself? Oops, you can't, you spent all your money on Starbucks and trips to socialist summer camp.
PJ 2:34PM (8/24/2008)
Gee, I wish I could tell that much about a person's character and socioeconomic status from a two-sentence post
:rolls eyes:
Graham 2:59PM (8/24/2008)
Sorry to break it to you RWD fan and Bruno. Your arguments don't hold water especially in light of what has happened in the oil market. Speculators who had nothing to do with supply or consumption are partially responsible for the high rise in oil prices. Since the commodities market for oil does not require that anyone actually take delivery of the "oil" the purchase, they can artificially drive the price of oil up without actually seeing an increase in consumption. If the oild commodities market were regulated like other commodity markets, then "paper" oil purchases wouldn't be allowed and the price would be much more tied to supply-demand rather than speculation. Luckily, eventually, supply and demand will force even speculative markets to re-adjust to reality over time. Still that doesn't help consumers while that speculative bubble is happening. If you're going to buy anything speculatively, you better know what you're doing or at least know more than the next guy.
SteveRB 2:58PM (8/24/2008)
Bruno -
I'm sure there are a lot of highly qualified professionals in your area who could help you with you anger management issues. Based on your little rant, I would seek their help immediately.
jcar302 4:26PM (8/24/2008)
A guy named "bruno" with anger issues, who would of thought?
Go back to breaking legs and busting heads, writing is not your strong point.
metavitaedotcom 6:28PM (8/24/2008)
@RWD fan, @ Bruno: Thanks to 11th-hour legislation pushed through congress+senate by the Boy Scouts at Enron (+a few others, I'd imagine) ICE Futures and OTC are Largely Unregulated traders/markets of oil futures. Fix that & prices Will come down.
While free markets don't benefit from socialist boa-constrictor regs, Everybody benefits from the ~50% solution.
The average joe does not usually deviate far from the status quo behavior, which is why specs can surf on things a bit and drive them up. -Even if the market for suvs craters.
If the guys here: http://www.globalresearch.ca/index.php?context=va&aid=8878
are even HALF right, those specs have been surfing for awhile.
++ExxonMobil makes so much $$$ in-part because they're the only company that had the full spectrum from exploration-drill-transport-refine-distribute-sell, until recently when they dumped their gas stations.
What would be more beneficial to everyone is getting bacteria or algae to kick out ready-to-go BioDiesel, instead of the inflationary eco-disaster that will be the heavy-metal-based battery future.
OppositeLock 12:24PM (8/25/2008)
Speculators are a very easy target for people who don't understand basic economics.
In a free market, speculators serve a very important purpose, they smooth out prices for scarce goods over time.
When it becomes clear that the auto industry is going to use more lithium than can currently be supplied, speculators buy it today, driving up today's prices and causing people and companies who don't really need it to find alternatives, leaving more for for the industries that really need it. The prices move up gradually rather than rapidly, which is far better for the economy than a sudden spike, which can lead to shortages of products.
Yes, it sucks for the prices to go up, but pricing is the best and most efficient method we have of resource allocation. Speculators take risks; if they guess wrong, they lose a lot of money.
Brian 12:51PM (8/24/2008)
Another reason why hybrids may not be the solution. Lithium and Nickel are subject to skyrocket because of demand. But GM needs high mileage hybrids. Not only because of consumer demand, but to offset the stupid CAFE demands in the future.
Reply
mike 12:51PM (8/24/2008)
"I'm just asking folks, but in our rush to get better fuel economy are we about to replace one form of dependency for another?"
Didn't GM do the same thing with Ehtanol? From Saudi Arabia to Cornistan?
It looks like GM will be the first on the market with Li baterries and Volt will be a limited sales car, so this shortage will not affect Volt.
As far as other companies, well they have CEOs that...think ahead, take advice, know what they are doing, read between the lines, ...adjust. So i would not worry about others, as i am sure they will come up with something. But if i were you John i would worry about Rick.
Reply
mike 12:54PM (8/24/2008)
Hey Brian i totally agree, let's kill CAFE and let's go back to 9 MPG sedans. While we at it let's kill all laws that protect air or environment. I for one am tired of swimming in clean water, i want to swim in chemicals and human excrement.
Reply
Frank 1:00PM (8/24/2008)
sarcasm much?
Mark Ryan 1:39PM (8/24/2008)
What's the mpg of that car in your avatar?
CAFE was behind the times when it first came about, may be again. Demand for fuel efficient vehicles will drive out the real fuel sippers, not CAFE. CAFE may affect which cars they try to dump on rental fleets.
Brian Reid 1:50PM (8/24/2008)
Cute sarcasm. Have you ever considered that while CAFE is one answer, it's just not a particularly good one? IMHO, CAFE and its defenders are both too ambitious and completely unrealistic. In this case, your reply demonstrates both qualities. Well done.
Brian 1:57PM (8/24/2008)
The market determines wether people buy fuel efficient cars. We didn't need CAFE a couple of months ago when people started trading in their SUVs. The new CAFE standards will cost an already struggling auto industry millions of dollars (that also get passed on to the consumer). And it kills niche product. Take GM for example. Even with there SUV and truck sales not having a good future, their commercial truck sales that people use and need for work cripple their fuel averages. Thus cutting out exciting product that petrol heads want.
Every industry expert knows that CAFE isn't the answer to solving fuel problems. Why don't you?
If CAFE was cut, does that mean that people automakers would start building more gas guzzlers? NO! Absolutly not! Not when gas is expensive and the threat of supply is still there. And to think about it, maybe if CAFE was cut out, they could spend more money on research for alternative energy. How about that.
mike 2:20PM (8/24/2008)
Mark you are wrong. Oil is a commodity, it goes up and down. What CAFE will do is once oil goes down, or consumers adjust to paying $3.50 a gallon, CAFE will make sure that the market will still have fuel efficient cars.
During the oil shock we all went small, but in late 80's-90's shifted to tanks, dinosaurs, COSCOmobiles and such. Had CAFE not been prevented from slowly increasing we would have had a far bigger offering of fuel-efficient vehicles and a somewhat smaller offering of tanks. Meaning more Navigator would be sold than Hummers, far more Escapes than Explorers.
More importantly CAFE would have made sure that all vehicles across the board get better mileage, all vehicles across the board would simply have to be 2-3 MPGs better. CAFÉ is basically there to make sure that people drive vehicles that do not harm the air quality and if you may remember CAFÉ was implemented to make sure USA uses less oil.
Graham 3:08PM (8/24/2008)
Mike
I agree. I miss the days of acid rain and the Cayahuga River burning. While we're at it, can I let my kids stand on the front seat of my station wagon while driving? :-)
Jim 1:10PM (8/24/2008)
High lithium prices will not be a bad thing. If recycled lithium costs 5-6 times as much as new lithium, then new lithium should equalize at about 6 times assuming energy costs are constant. Otherwise, expect the 6 + X energy increase as the new cost. As for me, I will continue driving my used car until it dies.
Reply
AMcA 1:27PM (8/24/2008)
I always thought that the cost of batteries reflected pretty much one-for-one, or a little less, the amount of energy that went into them.
Which, I say, must be counted in the overall energy picture of hybrids and electrics. So, if these vehicles can't pay for themselves dollar-wise, they're not paying for themselves energy-wise, either.
Reply