Thursday, April 30, 2009

Lithium: Demand is coming - Charging Up U.S. Battery Production TNR.v, SQM, GOOG, RIMM, AAPL, BYD, TTM, GM, F, WLC.v, CLQ.v, CNY.v, HUI, XAU, OIL, OIH

Our Dragon is Hungry and Demand for Lithium is coming together with Energy Security and playing ketchup with batteries producers from Asia. Our Next Big Thing needs base in stable mining friendly locations.

Kerry A. Dolan, 04.30.09, 06:00 AM EDT

The batteries for next-generation plug-in cars are made outside the U.S.--so far.
BURLINGAME, Calif. -- As the Big Three car companies gear up to roll out plug-in hybrid and battery electric cars over the next several years, one of the many looming questions (besides safety and cost) is where the batteries will come from.
The consensus is that lithium ion batteries are the way to go. These batteries, nearly universally used in cellphones and laptop computers, have a high energy density. That should enable vehicles to go farther on an electric charge than do, say, the nickel-metal-hydride batteries currently used in hybrid cars like the Toyota Prius and Ford Fusion.
The center of excellence for lithium ion batteries, however, lies in Asia. Work started in Japan in the late 1990s and is migrating to China. Sanyo, Panasonic and Sony ( SNE - news - people ) are among the largest, most experienced producers of these batteries, thanks to years of effort put into developing longer-lasting batteries for the Walkman (remember that device?) and its ilk.
But Ford Motor ( F - news - people ) wants the lithium ion batteries it plans to use to be made in America. If not, says John Viera, Ford's director of sustainable business strategies, "We're going to be turning from a reliance on foreign fuel to a reliance on foreign battery technology."
Ford announced in February that a joint venture between automotive supplier Johnson Controls ( JCI - news - people ) and French battery producer Saft would supply the lithium ion batteries for some of its plug-in hybrid cars. Viera said the venture initially wanted to build the batteries in France, but Ford nixed that plan. Johnson Controls-Saft announced it will make the batteries in Michigan instead.
Meeting the "made-in-the-USA" mandate means U.S. companies have to play catch-up, says Paul Beach, vice president of business development at Quallion, a lithium-ion battery maker in Sylmar, Calif.
"Sanyo produces 60 million [lithium ion] cells a month in a factory where the lights are off and there are just eight guys running it," says Beach. He figures Sanyo's cost is $2 per cell (a cell being the lithium ion equivalent of an AA battery--a building block for a battery). Quallion currently buys its cells from Japan and assembles them in Southern California into batteries for use in medical devices. If it built the cells from scratch in the U.S., Quallion's cost would be several orders of magnitude greater than Sanyo's, Beach estimates.
Both Quallion and A123 Systems have submitted requests to the U.S. government for grants measured in the hundreds of millions of dollars to build domestic factories to make lithium ion batteries. Such funding could indeed jump-start a domestic industry--even if it worries those who wonder whether some future battery technology might prove more compelling than lithium ion."
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