Will electric cars ignite a lithium boom?
Some suggest the lithium supply could eventually be tighter than oil is today
With such vast sums sloshing around, it’s no surprise that companies and investors are rubbing their hands over the prospect of a boom in the market for lithium. This unique metal, so soft you can cut it with a knife and so reactive it can become explosive when it comes in contact with water, is a key ingredient in the next generation of car batteries, and as plug-in hybrids and electric cars hit the mass market, some are wondering where all that lithium will come from. “There have been a lot of worries out there that all this money that is being spent on lithium-ion battery technology is going to create shortages,” says Jacob Grose, an analyst at Lux Research. In other words, if the fear now is Peak Oil, could the crisis next decade be Peak Lithium?
Along with the environmental benefits, a key driver in this push is to reduce the West’s dependence on Middle East oil. But it turns out that with lithium-ion batteries, the U.S. will still be forced to rely on foreigners. China is a major source of the mineral, as are Chile and Argentina, where it is extracted from brine pools. The world’s largest undeveloped lithium deposit is located in Bolivia, which has already indicated it won’t let foreign companies mine its reserves, and that could be a problem. Bolivia is hardly a friend to the U.S.—the government of President Evo Morales recently accused America’s ambassador of trying to break up the country and expelled him. In a report to Congress last month, the U.S. Government Accountability Office warned that by switching from gas-powered cars to lithium battery cars the U.S. could simply “substitute reliance on one foreign resource for another.”
This could be a major concern if supplies become strained—and some say they will be as electric cars catch on. Obama aims to have one million electric cars on U.S. roads by 2015, while JPMorgan predicts hybrid sales will reach 9.6 million three years later. Japanese carmaker Mitsubishi has said demand for electric cars could surpass supply by 2015, and a commonly-cited 2006 report by William Tahil of Meridian International Research, entitled The Trouble With Lithium, suggests the lithium supply could eventually be tighter than oil is today.
However, others question such predictions. For one thing, though Tahil’s report is repeatedly referenced in news reports, there are good reasons to be suspicious of its contents. An earlier study by Tahil on the 9/11 terrorist attacks offered “incontrovertible proof” the towers were destroyed by “nuclear explosions.” Even ignoring Tahil’s bizarre research history, his report assumes virtually every car sold each year—all 60 million of them—will be electric.
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