Electric car race could strain lithium battery supply

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Longer term, though, the picture is less clear. Batteries for carsare expensive, which is the biggest reason that plug-in electriccars cost more.
"Prices in the last couple of years have slowly gone up," Jaskulasaid. "But if the Chevy Volt and other cars like that become a bigraging success and the demand really increases but supply doesn'tkeep up, then the price will go up obviously."
Whether or not a global run on lithium pans out as projected by theworriers, the situation highlights an underappreciated risk when itcomes to alternative energy, namely securing supplies of naturalresources. In other words, if some green technologies aresuccessful in displacing fossil fuels, there could be shortages ofmaterials that most people never heard of before.
"In all these newfangled clean technology applications, quite oftenthe ones that appear to have strong growth potential face achallenge in that they are reliant on some material that has beenin short use to date," said clean-tech venture capitalist Rob Day,a partner at @Ventures. "Possibly, they don't have enough supply tofulfill (growth) requirements."
Other examples include indium, a material used in a new generationof low-cost CIGS solar cells, and coatings on solar panels, Day said. And for several years,researchers have sought to come up with an alternative material forexpensive platinum, which is used as a catalyst in fuel cells,noted Barbara Heydorn, who is director at the center of excellencein energy at science research nonprofit SRI International .
Eye on South America
Today, Toyota's Prius hybrid electric cars have nickel-metalhydride batteries. Because of improvements in weight and storage inlithium ion batteries, though, a number of auto manufacturers willbe using them in plug-in hybrids expected to come to market in thenext two years.
General Motors, for example, plans to use lithium ion batteries forthe Volt and the Saturn Vue plug-in hybrid, both of which areexpected in late 2010. Toyota, too, is planning cars with lithiumion batteries, but it is said to be researching zinc air batteriesfor vehicles as well.
Today, lithium is extracted from dried salt ponds or "salt flats."A briny liquid underneath the surface is pumped out and dried inthe sun. The dried material can be made into lithium carbonate,which is later processed to make lithium.
There are widely divergent views on whether the existing producersof lithium--most located in South America and China--can keep pacewith an onrush of hundreds of thousands or millions of new plug-inhybrid cars in the next few years.
Energy and transportation consultant William Tahil of MeridianInternational Research last year rekindled the supply debate in apaper, which was followed by another paper (PDF) issued in May.
He concluded that lithium supply will be absorbed largely by thefast-growing consumer electronics industry and that increaseddemand for lithium production will worsen relations between theU.S. and Latin America.
With continued 25 percent yearly growth in portable electronics,there would only be enough lithium carbonate for 1.5 million ChevyVolt-type vehicles by 2015 with "optimum production increases,"according to Tahil.
The results of Tahil's studies are disputed. Geologist R. KeithEvan, for one, calculated worldwide reserves and concluded there isan abundance of lithium to meet electric-car demand.
Tahil counters that the total inventory of lithium does not reflectthe increased mining cost of getting lithium from sources otherthan lithium carbonate.
In addition, further exploitation of the world's largest salt flat,the Salar de Atacama in Chile, and the development of new sites,such the large reserves in Bolivia , would cause substantial damage to those ecosystems, Tahil and theUSGS's Jaskula said.
"The point is that electric cars are supposed to be environmentallyfriendly cars and there are many other materials such as zinc andiron...which don't require any more environmental degradation thanhas already been done," Tahil said in an interview.
Financial analyst Craig Irwin, who is vice president of energystorage and energy efficiency at Merriman Curhan Ford, indicatedthat projected lithium supply has not dampened enthusiasm for thetechnology. He noted that lithium can also be extracted fromdifferent materials, including the mineral spodumene.
"There are two highly polarized camps," Irwin said. "The processingtechnology (for spodumene) is not entirely mature yet, but I don'tthink it's an insurmountable challenge."
Representatives from lithium ion battery maker EnerDel did notrespond to a request for comment before publication. Anotherwell-regarded lithium ion battery company, A123 Systems, declinedto comment because it is in a quiet period before its planned public offering .
Commodity rules apply
For economic reasons alone, some businesses are taking a strategicapproach to effectively sourcing materials, like lithium, foralternative energy technologies.
General Electric recently assigned a research scientist thefull-time job of studying sources of materials that are critical toGE, which is investing heavily in battery technologies for transportation and grid storage .
GE was caught "behind the curve" when one material used in itsaircraft engines shot up in price, so it's now looking for other"pinch points," said Mark Little, director of GE's research labs.
"The ability to supply batteries, including the raw materials, froma national security standpoint is a valid question which we shouldbe posing. I don't know the answer," said Glen Merfeld, manager ofthe Chemical Energy Systems Laboratory at GE Research.
Because lithium is a commodity like oil, the same economics apply,said Ripu Malhotra, associate director at the chemical science andtechnology laboratory at SRI International .
Limits of mineral supplies lead to higher prices and an incentiveto accumulate bigger reserves, he said. And the higher prices willspur investment in new extraction technologies from unconventionalsources. For example, the price of corn shot up to meet a surge inethanol demand. Now, producers are developing methods to usealternative feedstocks, like wood chips and grasses.
"These are brand new markets. If it truly becomes a limitingfactor, prices go up and we find new sources of material or ways torecycle the material," SRI International's Heydorn said.
Better Place, for example, plans to install battery-chargingstations in Israel, Denmark, and Australia to jump-start a rapidtransition to electric cars. But a lithium shortage will mean itsambitious plans would need to be scaled back, according to Nordan.
Speaking at recent conference, Project Better Place co-founder andadviser Andrey Zarur acknowledged that the company is "betting bigtime" that recycling technologies and alternative to lithium ionbatteries will emerge in the coming years.
Lithium ion car battery-pack suppliers themselves will have plentyof business in the years to come if sales come close toprojections. But that growth will affect commodity prices, Nordanpredicts. It's also leading to stepped-up research into alternativebattery chemistries, such as nickel-metal hydride variants, zincair, and magnesium.
"There's a flowering of interest in battery technologies withabundant materials," Nordan said. "Abundant materials are the wordsof the day."