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Lithium Drive: The End of the Oil Age - Deutsche Bank tnr.v, czx.v, rm.v, lmr.v,,,,, jnn.v, abn.v, ura.v

|Includes: FMC, LIT, SQM
After recent events in the Middle East this research looks right on spot.

  We will say that it is very conservative timing for the cost to reach $250 per kWh. Lithium battery price along with its reliability and capacity will be the most important parameter after the Oil price and its availability for the Electric Cars mass market. As we have wrote before:
"With Electric Cars all market estimations that we saw so far (apart from quote from Warren Buffett) looks like a drop in the bucket at a time. Will it be 2%, 5% or 10% claimed by Nissan in 2020? It is not a Revolution - it is like a tea party. We dare to differ and think that Electric Cars will provide to us a new Experience how we consume Mobility: energy efficient, environment friendly and cheaper with all cost accounted. And yes - they will sell us our cars one more time, this time in Electric version.
  Is it bad - not at all if you will be investing in 
Electric Cars value chain. Even if not, we will all gain from it more than from iPods - after all we have never heard about somebody being killed by CD, but those, who still do not believe that cars pollute and kill our environment including us, can try to breath from exhaust pipe for a while to be sure.
  We expect consumers to shift on a mass scale from CVs to EVs with prove that technology is viable and can provide the same utility with a Better Experience. Emotional Drive will be the driving force of this switch of consumer preferences."

 Argonne ARPA has more agressive targets in this field:


"Once we have moved the question of our Energy Security and mere survival into the technological space, we will start to talk about the R&D money spent and technological advance. Target is to bring the cost of the batteries down and its capacity up. Elon Musk was talking about 8-10% advance in battery capacity in a year now. DBM Energy is talking about 300  Wh/kg, without disclosing the cost. Argonne has a target of 400Wh on kg and price of 375 dollars per kWh.

  It will be translated into the price for GM Volt 16 kWh battery of 6,000 dollar a 40% reduction and Nissan Leaf 300 kg battery could be not 24 kWh capacity giving Nissan Leaf 100 miles range, but 120 kWh with 500 miles range! This technological breakthrough will end Range Anxiety and EVs will become truly the new revolution in a way of personal mobility.
  These results are still expectations at best and a few years into the future, but even DBM Energy claims could make this EV revolution reality today in case of its proper verification."

  But this report is much more than only the lithium batteries price:

In a December 2010 study, Deutsche Bank (NYSE:DB) analysts revisited some figures posted in its previous report and lowered their projected future costs for automotive batteries. DB's December 2010 study pegged the cost of lithium-ion batteries at $250 per kWh by 2020, a substantial reduction from the $350 per kWh it forecasted back in November 2009. After speaking with industry experts and numerous automakers, the DB team concluded that its November 2009 forecast for li-ion battery costs was out of date and recrunched the numbers. DB's price chart (shown above), illustrates the firms updated outlook.
Based upon its forecasted price drop for li-ion batteries, DB concludes that:
The consumer economics of a pure electric start to work without subsidy by about 2020 under this battery price decline scenario. The industry rule of thumb suggests that consumers will consider a 3-4 year payback to be an economic choice. With no subsidy, 2012 electric vehicle models will have a 10+ year payback vs. a typical combustion analog, assuming $3.25/gallon gasoline. With a $7,500/vehicle subsidy in 2012, an electric will have about a 5 year payback. Around 2015, assuming a $4,500/vehicle subsidy, the payback period starts to fall into a range at which consumers will view the economics favorably. By 2020, the economics should be able to more or less stand on their own with subsidy, and a small subsidy would clearly nudge the payback below 3 years.
DB's December 2010 study can be read in its entirety by clicking here (PDF). Who wants to guess what DB's outlook will be in late 2011"