The B2B platform for full-electric and plug-in hybrid electric vehicles: Industry News

Different stakeholders in the li-ion battery field had the opportunity to present their views on current problems and ongoing developments in the EV battery market at the 2nd Li-ion Battery Forum organised by Dufresne on 25-26 August in Beijing. cars21.com has paid special attention to what the lithium suppliers had to say to EV OEMs and suppliers.

Some see lithium as the oil of the 21st century: it is crucial to power advanced electric vehicles. Lithium carbonate resources are large but the production is limited to just a handful of companies in two different locations. This raises issues of security of supply amongst many within the automotive industry. Many players fear that they will face increasing prices from lithium suppliers.

This is the background to the two presentations from Rincon Lithium and Western Lithium during the EV Li-ion Battery Forum last week. They wanted to alleviate these fears and to explain that reserves and prices will not prevent EV based business from penetrating the automotive market.

Rincon: the new kid in town

Michael Tamlin, general manager of Australian-based Rincon Lithium, sees the demand for lithium increasing as the electric vehicle sector moves away from nickel-lead batteries to li-ion batteries. Lithium-based battery technology is generally regarded as the technology of the future, especially for PHEVs and EVs.

Mr. Tamlin does not see a lithium shortage looming. For the last 15 years, there has been large-scale production of lithium carbonate from both Chile and Argentina that is very likely to continue seamlessly. True, the political situation in Bolivia, the country with the richest lithium reserves, is troublesome. However, many alternative mining sites are spread over the world. The challenge only lies in exploiting them in a commercially viable way.

The currently installed lithium supply chain is sufficient for today's demand. It is highly consolidated with 3 large companies uniting 70% of global lithium carbonate production capacity in their hands: Chile-based SQM, US FMC Lithium and Germany-based Chemetall, which together weigh 3 billion dollars of lithium sales annually.

With the EV market taking off, however, demand is expected to double and new companies will be needed to join in and secure the supply chain for battery grade lithium. Entering the lithium market, however, is a long-term endeavour with years in preparation and high investments. So far, there are only two candidates on the horizon: Rincon Lithium and Western Lithium.

Rincon has been developing a new production site in Argentina in the Salta Province over the last 12 years. The site is rich in lithium carbonate and potassium chloride. The company made great efforts to de-risk the massive investment with pilot plants, patented production processes and the ownership of key input materials. Rincon plans on having the production site online in the next couple of years with an annual capacity of 50,000 tons of battery grade lithium in the long-run.

Of course, market prices have been rising along with intensifying demand. Over the last 5 years, the price for 1 ton of lithium has increased from 2,500$ to 6,600$, a trend that is very likely to continue and that directly impacts on the manufacturing costs of batteries.

Western Lithium: well established and still growing

Far from uncertain political conditions, Canada-based Western Lithium is exploiting a rich lithium side in Nevada, US. Western Lithium's CEO, Mr. Jay Chmelauskas, pointed out that the current $280 billion EV and electronics markets depend on a $70 billion market for batteries which in turn depends on a $1-3 billion dollars market for battery grade lithium.

He confirmed the projection of rapidly rising demand for lithium carbonate expressing it in clear figures: given a 25% market penetration for HEVs and a 10% share of EVs, Western Lithium estimates the lithium demand by 2020 for automotive battery applications alone at 286,000 tons (compared with 100,000 tons today).

Western Lithium as well as Rincon are however clear on one point: the market is able to satisfy the rising demand at reasonable prices and both companies intend to be among the central players.  

The next EV Battery Forum will take place in Europe 12-14 April 2011 and in China 6-8 September 2011.