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Lithium might dominate ‘transportation batteries’ by 2022.

Fri, 05/04/2018 - 18:20 -- Xuan Zhong
Lithium might dominate ‘transportation batteries’ by 2022.

Lead industry chiefs have been given their strongest warning yet that lithium is eating into the worldwide market for transportation batteries— and with a voracious appetite.

In an unprecedented move in Battery Council International’s five-year Starter lighting and Ignition (SLI) batteries forecast, industry veteran Ray Kubis (pictured) last week included an impact assessment of lithium-ion  on the former 100% lead-acid market.

But it was hard to determine whether lead-acid makers should be concerned or seriously worried about future prospects growth.

While Kubis explained the parameters in his model, legislation might well be the overwhelming factor in determining the growth or decline of lead’s fortunes.

Kubis hit out at the approach to lead in the European Union— where he said the continued exemption to the end of life vehicle ban on lead batteries “cannot be taken for granted”. 

“This policy lacks common sense when you contrast nearly 100% recycling and reuse of lead batteries to what is happening with the whole range of lithium batteries today in Europe at the end of their life,” Kubis said.

While batteries for transportation could swell in value to more than $128 billion dollars with a CAGR of more than 20% by 2022, there are a considerable number of caveats in that number that will determine how big a slice the lead market retains. 

See Chart 1 (click link to open image in new window)

Commodity pricing is a critical. Kubis estimated only a small increase (7%) in the cost of lead to $2,500 per metric tonne but severe rises in the cost of cobalt (58%) and 38% in nickel, which would limit price falls in lithium-ion batteries. These two materials and not lithium metal itself are the key drivers to lithium battery cost.

Nonetheless, the impact of pure electric cars and hybrids will swell lithium’s market share of “transportation batteries” to more than 60% of a $128bn market with lead being left with a rump of $31bn in stop start batteries. 

See Chart 2 (click link to open image in new window)

Such a scale shift from 2017 (when the lithium share was just 25%) could support even wider differences in R&D and other improvement programmes for advanced lithium versus advanced lead batteries,” Kubis said.

But Kubis believes lithium would not have it all its own way, with the “inevitable occurrence of many future safety incidents”— just one of the challenges faced. Lithium battery makers would also have to deal with “tricky global supply chains” and need to develop a “credible recycling scheme for sustained high growth”.

Kubis said the “real sustainability facts” on lead, “unlike any other widely used product of nearly 100% post-use recovery, recycling and reuse, needs to be told and sold to regulators everywhere for the benefit of consumers and our planet”.

Greater industry investments would be key too, Kubis added. “There is an estimated 600 GWh of capacity for lead batteries worldwide today for transport applications and another 100 GWh is forecast to be required by 2022.” 

“A reasonable investment for a factory to produce 15 million high quality SLI type batteries a year, or 15 GWh of annual capacity, means an initial investment of about $300 million. This includes a growing share of the higher performing stop/start batteries.”

For lithium, Kubis said figures from Tesla to South Korea and China’s leading producers “vary, yet a reasonable average appears to be about a $3bn investment for a factor with 25 GWh of annual capacity”. To reach the required 350 GWh needed by 2022, “this means combined added investments of about $24bn by lithium makers”.

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