Nissan breaks silence on lithium consumption

Nissan's revelation that its 24kWh battery for the Leaf EV will use 4kg of lithium (metal equivalent) breaks the silence of automotive and battery suppliers over the use of much-hyped lithium.  For every 500,000 Leaf-sized 24kWh lithium-ion battery powered EVs, lithium demand will be around 2,000t (metal equivalent).  This equates to just under 10% of total lithium production in 2008.

Nissan's Leaf EV lithium-ion battery is rated at 24kWh, compared to 1.9kWh in the S400 Blue Hybrid, 16kWh in the Mitsubishi MiEV and Chevrolet Volt and 53kWh in the Tesla Roadster.  Until now, data on consumption of lithium in the automotive batteries used in these hybrid and full electric vehicles (HEVs and EVs) has been withheld, prompting estimates from industry followers and analysts varying between a few grams to several kilograms of lthium per kWh.  Nissan's revelation that its 24kWh battery, developed in collaboration with NEC, will contain 4kg of lithium (metal equivalent) allows for a more insightful analysis of future lithium demand.

 

Estimates on future HEV and EV production also vary widely.  However, assuming production of lithium-ion battery HEV and EV powered vehicles reaches 500,000 units in 2015 (just under 1% of current worldwide automotive production) and the average vehicle has a 24kWh battery, lithium demand would reach around 2,000t (metal equivalent).  This is equivalent to just under 10% of total lithium production in 2008.

 

Capacity utilisation in the lithium industry in 2008 was around 75%.  The leading producers of lithium from brines: SQM, Chemetall and FMC, are expanding capacity (by around 5,000t metal equivalent).  Lithium supplies from exisiting and expanded operations are therefore more than sufficient to meet potential demand for 500,000 lithium-ion battery powered vehicles in 2015 and could potentially meet demand for up to 2 million lithium-ion battery powered HEV and EV vehicles in that same period.  This scenario excludes potential additional capacity in China, with brine producers of lithium in Tibet and Qinghai adding a further 10,000t (metal equivalent) of lithium production capacity by the early 2010s (although technical hurdles remain), and any new companies such as Galaxy Resources, Western Lithium and Canada Lithium entering the lithium market.  Oversupply might be a more pressing question than lithium availability.

 

It remains to be seen just how quickly demand from automotive lithium-ion batteries for lithium will evolve, given that only a small number of these batteries and their associated platforms have actually been produced and tested.  In the mid-term, questions on lithium supply need not be asked; instead it may well be a case of who can supply lithium the cheapest and currently that ball rests firmly in the established brine producers court - competition in the lithium market may be about to hot up!