According to Metalary, a metal price-tracking portal, the cost of lithium has jumped from $9,100 per tonne to $16,500 in just 12 months. As recently as 2014 the lightest metal sold for just over $5,000 per tonne.
Lithium is a fundamental constituent of lithium-ion (LI-ion) power packs and gains its advantage from a combination of low atomic mass and high electropositivity (a measure of a material’s willingness to shed electrons and hence form ions - a critical requirement for electrochemical reactions in batteries). Such properties endow Li-ion batteries with a cell potential of around 4V (compared with 2V for lead/acid and 1.2V for nickel/metal hydride) and an impressive energy density of around 400Wh/l (around eight times greater than lead/acid cells and double that of nickel/metal hydride). Little wonder then that Li-ion cells have become the mainstay for batteries powering everything from hearing aids to Teslas. High demand is stretching supply and pushing up prices.
The most significant conventional market for Li-ion batteries is the consumer electronics sector. Precise figures documenting Li-ion battery pack shipments for this sector are hard to come by, but some analysts estimate that upwards of six billion lithium-based batteries were shipped last year inside a rapidly expanding family of portable devices.
Now demand for electric vehicle (EV) power packs is exacerbating supply constraints and pushing cost even higher. According to Australia’s Macquarie Bank, global sales of EVs rose to 1.1 million vehicles in 2017, from 740,000 in 2016, an increase of 51 percent. While this only represents a fraction of the 88 million autos sold last year, EV sales are set to continue to grow quickly. Macquarie forecasts that five percent of new vehicles will be EVs by 2022. And each one of those uses a lot of batteries; the Tesla Model S, for example, includes more than 7,000 batteries, each similar in size to the AA type.
EV consumers will inevitably bear the brunt of the cost increases in the lithium used to fuel their vehicle’s batteries. Price hikes tend to dampen demand so do the analysts have to tone down their EV growth forecasts? Probably not, for two reasons: The lithium price hike is likely to be temporary, and, despite the big numbers, EVs don’t actually use that much of it.
The current shortage of supply is not down to a lack of raw material; according to analyst Bloomberg New Energy Finance (BNEF), the next 12 years of projected demand is only going to deplete reserves by around one percent. But digging it up, refining, and shipping the element is another matter.
Before it became popular for batteries, Lithium was in demand for nuclear bombs. Strategic arms limitation agreements changed that, and many mines were subsequently mothballed. Now, apart from its use in glass manufacture, Li-ion batteries are the largest driver of the appetite for lithium. New mines are planned as car makers invest in miners from the main source countries of Chile, China, Argentina, and Australia (in an echo of what Chinese steel fabricators did in the early part of the century to secure iron ore supplies). While mines are major projects and take years to come on stream, the capacity will eventually be in place and prices will drop to reflect supply.
And that supply will be more than sufficient to fuel a fleet of EVs rising to perhaps 30 million vehicles by 2030 (according to BNEF) because each uses a relatively modest amount. The 7,000 batteries in the Tesla S, for example, weigh 545kg but consume just 7kg of Lithium. Consequently, the material has little effect on the price of the batteries (a tripling of the cost of lithium from the current price would add perhaps two percent to a Tesla S power pack) let alone a $100,000 EV.
While Lithium’s high electropositivity does make it the “secret ingredient” that gives Li-ion cells their advantage, it is not the only critical component of modern batteries. The best of today’s Li-ion cells combine Lithium Nickel Cobalt Aluminum Oxide (LiNixCoyAlzO2) cathodes, because of its superior energy density, with Graphite (Carbon) anodes. The relatively abundant (and therefore inexpensive) Aluminum, Nickel and Graphite make up 75 percent of the cathode and the anode. The other 25 percent of the anode comprises about half Lithium and half Cobalt.
And if you thought the price of Lithium was steep, the price of Cobalt is enough to make your eyes water. At the end of 2017, the London Metal Exchange (LME) quoted a price of $75,500 per tonne, a 129 per cent increase over the year. At the time of writing, the price had reached $88,500 per tonne. If the price of cobalt tripled from its current level, it would add 15 percent to a Tesla S’s power pack. That would be significant enough to stymie growth.
The good news is, unlike a modern cell’s Lithium, the Cobalt could be replaced. Iron is a good alternative candidate. Not only is the material dramatically cheaper than Cobalt (high-grade Iron ore sells for about $100 per tonne) it also promises performance advantages to the battery.
The capacity of the cathode is limited by the number of electrons in the transition material (the Cobalt in conventional cells) that can participate in the reaction. In a Lithium-Cobalt cathode, one Lithium ion is “mobilized” for each Cobalt atom; in the Lithium-Iron device four or more ions can be mobilized for each Iron atom. The result is a battery of much higher energy density that can provide higher current and recharge faster.
If only it could be made to work. Iron has repeatedly failed to replace Cobalt in practical cells because chemical instability means that once discharged, the battery can’t be replenished. But researchers aren’t giving up. For example, backed by the U.S. Department of Energy, engineers at Northwestern University's McCormick School of Engineering have developed a prototype Lithium-Cobalt cell that overcomes the instability, allowing thousands of recharge cycles of a battery that works much better than today’s devices. And it’s a battery based on a material that’s already mined in huge volumes, and, in making up about 5 percent of the Earth’s crust, offers a virtually inexhaustible supply.
Steven Keeping gained a BEng (Hons.) degree at Brighton University, U.K., before working in the electronics divisions of Eurotherm and BOC for seven years. He then joined Electronic Production magazine and subsequently spent 13 years in senior editorial and publishing roles on electronics manufacturing, test, and design titles including What’s New in Electronics and Australian Electronics Engineering for Trinity Mirror, CMP and RBI in the U.K. and Australia. In 2006, Steven became a freelance journalist specializing in electronics. He is based in Sydney.
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