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Jack Lifton is an Independent consultant and commentator, focusing on the market fundamentals and future end use trends of the rare metals. He specializes in the sourcing of nonferrous strategic metals and on due diligence studies of businesses in that space. His work includes exploration,... More
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  • Attention Hummer And Tesla Electrification Converters: There Isn't Enough Lithium Produced For Both You And The Rest Of Us 0 comments
    Apr 27, 2009 9:54 PM | about stocks: GM

    A recent article in Wired entitled Hybrid Hummer promises 100 Miles Per gallon made me think.

    The celebration of the proposal of using of public money for the creation of sophomoric toys for elites ignores the fact that the supply and demand of lithium is a zero sum game. When the demand for high end toys for people with unlimited discretionary spending ability is high the demand for practical devices for the person of average means will go unfilled. Each 53 kWh battery for a Hummer, for example, will, if a lithium-ion type, use 53 kg,, or 116 lb, of lithium carbonate; it would cost today as much as $53,000 at retail just for this battery!

     
    This article in Wired says that an internal-combustion-en... Hummer fitted as a hybrid with a 53 kWh lithium-ion battery weighing (the battery that is) nearly 1/2 ton will deliver performance in range, speed, and acceleration like the same Hummer fitted only with a large V8 gasoline fueled internal combustion engine but give the overall equivalent of 100 miles per gallon of fuel consumed.

    Let's look at some of the cost figures associated with this "conversion."

    1. A 53 kWh lithium-ion battery today will cost 1000.00 per kWh to buy,
    2. The 53 kWh lithium-ion battery will require 53 kg,, 116 lb, of lithium carbonate to construct, and
    3. The 53 kWh battery will weigh nearly 1000 lbs.

    In 2008 there were 27,600 metric tons of lithium mined in the world; this equates to 165,600 metric tons of anhydrous lithium carbonate.. Of this total 25% was consumed in the production of rechargeable batteries for personal electronics, portable computers, and power tools.  The USGS figures for 2008 indicate that there may have been a surplus of lithium of as much as 5000 metric tons, 30,000 metric tons of lithium carbonate, from the 2008 production. Let's assume that this is true.

    Let's also assume that the Tesla automobile uses about the same size battery, although in fact it uses a smaller battery of only some 43 kWh capacity.

    This means that if there were indeed a surplus of 30,000 metric tons enough lithium carbonate was available from the 2008 production to make a grand total of 250,000 Hummers and Teslas and not any other battery powered car whatsoever. Each Tesla or Hummer would require the use of enough lithium to make 3 Chevrolet Volts, so if we made no Hummers or Teslas we could make 750,000 Chevrolet Volts from the surplus.

    Last year there were produced around 65,000,000 cars and trucks altogether globally. The highest number of electrified cars, of the size of a Chevrolet Volt,  using lithium ion batteries that could have been made would have been around 1.2 percent of them if the surplus of 30,000 metric tons is an accurate figure.

    Now let's look at what would be the case if there were no surplus of lithium in 2008, If demand equaled supply.

    In that case lithium-ion battery cars could only be built with new incremental production of lithium, and since there is steady growth in the existing categories of uses for lithium the car battery production would have to be at the expense of the use in an existing category.

    The solution to this problem of course would be to increase lithium production, but this is a slow process of first meeting regulatory requirements and then making investments of time and money to develop mines and separation and refining facilities while building battery factories and hiring and training workers in order to wait for raw material flows to start. Simultaneously automotive supply and assembly plants would have to be built and staffed so the bodies could be ready once the power trains were available.

    This is a huge and international type of cooperation that has never before been accomplished in a fluid competitive atmosphere of proprietary technologies and processes.

    In any case let's assume that all of this can be done and that lithium production can be quadrupled in the next 10 years. Let's say that in this case we could then have 120,000 metric tons a year of new lithium carbonate production available for batteries, and we could build 3,000,000, Chevrolet Volts or 1,000,000 Hummers and Teslas altogether in 2019.

    It is projected now that the global production of personal size motor vehicles for 2019 will be between 125 and 150 million units. Lithium mining production optimistically can produce only enough material in 2019 to make a maximum of 2%  of that total as electrified Chevrolet Volt size and performance cars, or 2/3 of 1% of that total as high performance Hummer or Tesla size and type vehicles.
     
    Let's be more optimistic and say that 60% of all of the lithium produced in 2019 will be used to make electrified cars of the size and performance of the Chevrolet Volt. Then the maximum number of Chevrolet Volt size and performance cars that could be built would be 9,000,000 or the industry could produce 3,000,000 Hummers and Teslas in 2019 or a range from 2% of the world's production to 6%. The truth is that the Chevrolet Volt's limited range and performance is due to the small size and capacity and capability of its battery, so lest strike a medium and say that a Chevrolet Volt size car with 3 times the range and performance characteristics of the proposed 2010 model would be the production model of choice in 2019. In that case it would need a battery three times larger thus bringing the maximum number of Chevrolet Volts to be built back to 3,000,000 due to resource production limitations. Thus the totasl proportion of electrified vehciles using lihtium-ion batteries in the 2019 global fleet would be less than 2%.

    Is there any doubt that in 2019 electrified cars using lithium-ion batteries will only be for the few and/or the very privileged?

    If so, is there any point to using public money to develop them?

     
     
     
    Stocks: GM
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