Old 02-23-2011, 04:45 AM
Sparty Sparty is offline
Join Date: Mar 2009
Posts: 1,128
Default Will there be a shortage of Lithium

In the short term it appears that there are adequate Lithium supplies... but as shown below the situation may tighten in the medium 5-10 year term.

The TESLA article below seen in this light is somewhat surprising... and I wonder if it is because the Lithium brine produced Lithium carbonates aren't entirely satisfactory for the production of very high grade Lithium carbonate required to make powerful, rapidly rechargeable batteries especially in regards to China's Lithium battery makers.... ...

"South American brines sourced material does not currently compete in the Chinese market in significant quantities. Apart from the import duty issues and freight differential, brines sourced lithium chemicals have different contaminant elements that the Chinese cathode makers are not necessarily geared to handle."

A Dangerous Dependence on Lithium

Tesla Motors is attempting to rapidly expand into the mainstream electric car market but we have concerns with its dependence on lithium. Lithium is believed to have the second smallest accessible metal supply in the world, which stands right above the "rare earth metals" category. Should Tesla be highly successful and sell thousands of its new Model S in conjunction with other large scale electric car competitors there is a real probability that the price of lithium batteries could sky rocket. Given that this is the most expensive part of an electric car this could destroy a profit margin that Tesla doesn't even have yet. We think Tesla had it right by targeting a very niche luxury market but by going mainstream this early in the game it has increased its own risk profile unnecessarily. Many industry auto experts see lithium as the "ultimate" limiting variable for the electric car market. As a firm it has failed to address this concern and perhaps rightfully so in that it might not really know what to say about the issue at hand. Tesla Motors may sell thousands of affordable electric cars but unless it has a plan to deal with potential supply constraints that could shoot lithium prices higher this company will be six feet underground before it ever gets off the lot.
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