Precious Metal

Battery-powered electric vehicles may be heralded as the next big thing, but will lithium reserves that are already being devoured by consumer electronics be enough meet future demand?

Forget peak oil, could the next burning issue be peak lithium? If the hype surrounding electric vehicles (EVs) turns into reality then huge quantities of this element are going to be needed. And, as they race to secure future supplies, a battle looks set to commence between the automotive and consumer electronics industries.

General Motors has the Volt, Nissan the Leaf. In fact, nowadays it’s hard to find a carmaker that doesn’t plan to launch a battery-powered EV or plug-in hybrid in the next five years. Although the predicted take-up of these cars varies, from the modest one million sales per year in 2020 from market forecasters IHS Global Insight to Nissan’s ambitious forecast of ten times that, it is clear that demand will increase considerably from the 5,000 sold in 2008. Meanwhile, global sales of conventional hybrid cars are expected to surpass the one million mark in 2010, double what was sold in 2008, and will continue to grow in popularity thereafter.

Just as lithium batteries now dominate most portable consumer electronic items such as laptops and mobile phones, lithium ion batteries look set to take over from the nickel metal hydride chemistries that are currently used in most hybrid and EV applications. This is for several reasons, not least the fact that lithium is not toxic, it has a high specific energy content and it is currently cheap and readily available.

But concerns have already arisen about the sustainability and availability of lithium. One of the most detailed studies to date in this area has been carried out by French consultancy Meridian International Research, in a series of reports entitled The Trouble with Lithium. One of the key findings was that if demand from the portable electronics sector continues to grow at 25% per annum, as it has done in recent years, by 2015 there will only be 30,000 tonnes of high-purity lithium left for the automotive industry. This, it says, would be sufficient for less than 1.5 million GM Volts or similar EVs worldwide. “Realistically achievable lithium carbonate production will be sufficient for only a small fraction of future plug-in hybrid and EV global market requirements. Therefore other battery technologies that use unconstrained resources should be developed for the mass automotive market,” the report warns.

CNBC