Slow Start for Lithium-ion Hybrids

Could it be that the Japanese car companies have such complete control of the U.S. market that they are trying to keep the American producers alive because they can’t handle all the business they would get if GM/Ford/Chrysler go under?  And could it be that the Japanese think there is much more mileage left to go in the current hybrid technology that uses NiMH (nickel-metal-hydride) batteries before any transition to Lithium-ion happens?

Those are two of many interesting views of reality contained in an essay by Jack Lifton that was posted on  ResourceInvestor.Com and forwarded to me by my Australian reader, P.W.   Interestingly, when you think about it, the only new lithium-ion powered vehicle announced so far by a major car company with a scheduled intro date is the GM Volt.  Since (GM) is in the critical care unit, and since the Volt is an experimental vehicle that is acknowledged to be a money-looser for a while, that’s not exactly a booming endorsement of lithium-ion technology. 

Toyota (TM) has said they will have a lithium-ion vehicle for sale in 2011, but there are not details.  Mr. Lifton says most of Toyota and Honda’s (HMC) hybrids will be NiMH until a reliable and profitable L-i battery is available to them.  Nissan, by contrast, is counting on the L-i for its new “city cars,”  but we don’t have a firm date from them yet.   So the bottom line is that technology is still an unknown that will determine the timing of the L-i battery powered car.

Mr. Lifton’s thesis is that the current Prius will be upgraded  still using NiMH batteries and that in fact most new Japanese hybrid electrics will also use the old NiMH battery technology for many years to come.   His corollary is that the exotic metals needed for NiMH batteries may become in very short supply and that some Australian and Canadian junior mining companies may therefore be good bets. 

What is more interesting to me is what all this says about the time table for major increases in lithium sales, which is a major basis for my interest in the Chilean mining company SQM.  It may be that the timing of this market will be extended forward, not a shocking development for a break-through technology.   I have now taken nearly all my profits in SQM as part of my strategy of being substantially in cash. 

Anyway, the piece by Jack Lifton can be read here.

Comments

[Doug Korthof:]

You don't understand. Lithium is, like Fuel Cells, just a mythology to delay introduction of the EV.

The only proven batteries are NiMH, still running in Toyota RAV4-EV, last sold in 2002, and lead-acid.

So the fact that NO company is using NiMH for plug-in EVs, but are "researching" Lithium, indicates that they don't want to do plug-in EVs.

Those who believe in Lithium EVs, Hydrogen cars, or the Easter Bunny ... well, they can just continue to believe. Faith is free, if frivolous.

Meanwhile, we continue to drive our oil-free Toyota RAV4-EV, on excellent NiMH batteries.

2008 Jul 30 03:52 PM

[The pessimi...:]

this will take patience and flavored by probability. If you are patient enough it probably will happen.. eventually. NiMH will run its course then we most likely will ramp up on Lithium. SQM was sold off and the eye is not so keen on this oversold liviathon.

2008 Jul 30 05:39 PM

[Mayascribe:]

Who in the heck hires these Seeking Alpha writers?

The other day some moronic attorney blogs about the high risk of putting money into lithium batteries (especially lithium car batteries). If he would have owned ENER1 (HEV) he'd would have enjoyed the stock going from in the high $5.00 area earlier this month up to today's closing of $7.39. The HEV in my portfolio is up a whopping 31.68 % since I started e-trading July 2, 2008.

Then this idiot blogger trashes SQM and what happens? SQM makes a mad dash up 9.6 % today.

Please, Seeking Alpha! Please keep your bloggers coming. Their trashing anything lithium is somehow putting a surprising amount of money into my portfolio.

I say, if you want to win, then buy lithium!

2008 Jul 30 05:57 PM

[SmartMan:]

As I read news and articles about Lithium ion powering the future of electrification car projects, most car manufacturers already decided prioritizing the use of Lithium battery technology. I believe that the future of hybrid and plug-in cars will be the use of lithium. Battery manufacturer are also preparing for this paradigm shift. Battery manufacturer are expanding their facilities for there will be an increase demand in this technology in the near future and it will huge.

www.autocar.co.uk/News.../
www.guardian.co.uk/bus...
www.industryweek.com/R...
www.japancorp.net/Arti...
www.reuters.com/articl...
www.reuters.com/articl...
uk.reuters.com/article...
www.greentechmedia.com...
www.domain-b.com/indus...
dvice.com/archives/200...
www.news.com.au/story/...

SmartMan

2008 Jul 30 06:24 PM

[isaac the t...:]

Hey Mayascribe,
The blogger that you bash is in fact a very thoughtful commentator. He has been recommending SQM for a long ride up to its recent top. I suggest you go to his site and read more of his thoughts- take what you like and discard what you don't. I find his comments to be thought provoking, and I keep in mind that "predictions are hard to make- especially about the future".

2008 Jul 31 11:41 AM

[Grampa Jim:]

What's the latest on the super- or ultra-capacitor? I see where a Canadian car compny, ZENN (zero emissions, no noise) has a deal with EEStor, the mysterious Texas super-capicitor company, to market an electric car that will supposedly leapfrog the Nickel MH and Li-i battery powered cars in range, speed, power and economy. This ZENN car will be the freeway-capable successor to their currently marketed, 25 MPH limited, neighborhood shuttle. Some say EEStor is all smoke and no fire, but they're backed by Cleiner Perkins Caulfield & Beyers, who says it's their highest risk, potentially highest return venture ever. CPCB doesn't back smoke without some pretty good assurance of fire.

2008 Jul 31 12:10 PM

[CaptBob:]

If you think NiMh is the holy grail, put one in your cell phone and toss that LiOn, now see how long you last.

In E-cars its ampere-hours and weight. And lithium has the gold medal in both. The only drawback is initial cost--but hold on--did someone just say oil is going up!!--Again??

2008 Jul 31 12:12 PM

[fries22:]

I think it is the flux capacitor that will trump all of these alternative technologies if only it be given a chance.

2008 Jul 31 01:15 PM

[Paul Killinger:]

Good shot, User!

I understand only two countries in the world have significant lithium deposits, Chile and Peru, while China is thought to have some, as well. If so, wouldn't relying on them for large amounts of this relatively rare mineral simply be courting the advent of OLEC? And I doubt that nickel battery technology is standing still. Besides, it's a relatively abundant mineral, as well.

2008 Jul 31 03:55 PM

[Jim Kingsdale:]

It's interesting that we have one vote for NiMH, one for lithium-ion, and two for capacitors. My point was that technological developments will be determinative in terms of when l-i becomes dominent, which should be a fairly non-controversial comment - true by definition. Same would hold for the possibility of capacitors. Maybe they both work for different markets. The only controversial thing in what I wrote - and the only reason to write it in the first place - is that the onset of the l-i age of motoring may not be quite as fast as all the car companies' announcements would suggest. Note that SQM's capital budget puts lithium in 3rd priority and only expands that capacity by 25%. Seems like SQM also thinks there is some time before a huge order inflow happens.

Incidentally, I love SQM's product line. But the stock doesn't seem cheap at somewhere around 25 -30 times projected earnings.

2008 Jul 31 04:05 PM

[lonie:]

It seems as thou an opinion can't be expressed without someone calling you stupid .
Carry on Jim ,i appreciate your opinions.

I have to disagree with all the hype about battery technology . it has it's place and always will and will become more important as time progresses.

I think the energy solution is right under our feet , Natural Gas. It is easy and cheap to convert an existing vehicle ,can be done in one day at a cost of appx. 1000 dollars if not for the bureaucratic morass that has developed over the years . You handle it in same manner as you would Propane which has been in use for many years.

Here in Thailand even ' shade tree ' shops convert vehicles from diesel or gasoline to Natural Gas.

There are over 300 fueling stations existing and more being installed every day . All taxis ,half buses and appx. 20 % of large trucks and private cars are on Natural Gas.
Half the vehicles in America could be converted in 2-3 years along with thousands of fueling stations.
Would Natural Gas price increase ? Yes, temporarily until drillers punched holes .
So, what is the problem ? Government !!!!!

Dempse

2008 Jul 31 09:22 PM

[David @ the...:]

Hey Jim - enjoying your articles - and would appreciate one on Zenn Motors - due to their being their being the only way to indirectly invest in EEStor.

David at www.hybrid-car-show.co.../

2008 Aug 09 06:10 PM

[JFrazer1:]

Natural gas has good potential. In the long run, it's only a stop-gap. However, that stop-gap could be 30-40 years, and by then who knows what the best battery tech will be. We could have cold fusion powered cars by then, haha. Even if lithium doesn't get put into cars, demand will still increase because of its use in electronics. Also, SQM is not a 1 trick pony.

I am concerned that the major lithium deposits are in Chile, Peru, and China respectively. China has had some foresight and created tight trading relationships with Chile and Peru. I'd hate to see us transition from Oil Wars to Lithium Wars. That's another reason I like natural gas.

I think the best bet is to invest in natural gas as well as lithium. I think will go with CLNE, SQM, ENS, and ALTI together as a high risk 5 year package.

Are their other good lithium mining companys, or companies that produce both NiMH and Li-Ion batteries?

Mr. Frazer
shield_of_the_lion@yah...

2008 Aug 24 03:04 AM

[lance sjogren:]

Korthof:

Lithium battery technology has inherently far superior capabilities to other types.

We are still I would guess 3-5 years from having high-performing Lithium batteries for EV's.

However, where is battery research going on today? The vast majority of the articles I see about battery R & D involve various forms of Lithium batteries.

PHEV's and EV's using Lithium batteries are definitely not in the category of hydrogen or the Easter Bunny.


You sound to me like someone with a vested interest in NiMH or Lead Acid.

Based on its superiority on parameters such as energy density, there is every reason to believe at this point that Lithium batteries will be the mainstay of EV's. In the meantime I could imagine that there will be some vehicles in the short term that use less capable but more mature battery types such as NiMH and Lead Acid.

2008 Sep 18 11:09 AM

[lance sjogren:]

JFrazer:

Good point, natural gas vehicles are an excellent bridge while we are still working on batteries good enough to power true EV's.

Don't worry about Lithium supply, however. There is a 25 billion pound deposit of Lithium Carbonate in the western US. You can invest in it by buying Western Lithium or Western Uranium. (Western Lithium is a spinoff of Western Uranium, but WUC retained a 30% stake WLC when it spun it off.)

That is a mining deposit rather than a brine deposit like the Latin American Lithium sources have. As I understand it it costs a bit more to mine lithium in the ground compared to extracting it from brine.

But bottom line is that there is a huge supply of Lithium in the US that could be extracted at a price that would only incur a slight increase in the cost of a Lithium battery-based EV.

2008 Sep 18 11:14 AM

[lance sjogren:]

Frazer:

I too am invested in Natural Gas and Lithium.


My NG's are pretty conventional ones, CHK, NFX, UPL, XTO

My Lithium play is WURNF. (Western Uranium trades in Canada but has a pink sheet version for US investors).

By the way- anyone who isn't familiar with trading pink sheet versions of Canadian stocks- you have to be careful how you do that so as to not pay big premiums due to lack of liquidity, poor execution on the part of some brokers, and high commissions in the case of some brokers.

I have found that they trade very well in TD Ameritrade. As far as I can tell, I generally get the pink sheets at the same price as I could get the Canadian stock (there is a slight tedious complication, however, you have to convert CAD to USD to know what limit price to set, since the Canadian stock trades in CAD and the pink sheet trades in USD)

2008 Sep 18 11:20 AM