The Potential For An Electrified Future For Ford Depends On Lanthanum and Lithium, Whose Supply Is Not Assured

by Jack Lifton on March 9, 2009

in Batteries, Hybrids & EVs, Lithium, News Analysis, Rare Earths

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The CEO of the Ford Motor Company doesn’t seem to worry about supply or value chain dynamics for the critical raw materials for the batteries or the electric motors that his company, Ford, would need its suppliers to have access to, in order for Ford’s future to be electrified.

The total global new production of lithium, stated as metallic lithium, in 2008 was 21,000 metric tons (t) of which, perhaps, as much as 5,000 t was surplus for which there was no demand.

Of the 16,000 t which was produced and consumed, some 25%, 4,000 t, were used to manufacture lithium-ion batteries for personal electronics, power tools, and mass storage; only a negligible amount was used to hand-build battery power packs for vehicular electrification. It is stated often by lithium-ion battery vehicle electrification proponents, that the use of lithium for batteries is increasing by 25% a year. What is left unstated is that this growth is in the first categories mentioned above, not in the building of vehicular electrification battery packs.

A battery pack such as is proposed for the Chevrolet Volt by LG, would contain, perhaps, one kg of lithium, so that there was enough surplus lithium produced in 2008 to manufacture 5,000,000 Chevrolet Volt sized battery packs without interfering with the supply of lithium for other existing uses.

It is likely that lithium production for 2009 will be less than it was in 2008, because demand for all existing uses of lithium is going to be less in 2009 than it was in 2008, and this will mean that marginal operations will cease production, as prices drop towards or below fixed costs.

New lithium production from brine, which was well underway at the world’s largest producer of lithium from brine, Chile’s SQM, was set to increase SQM’s production from 9,000 to 14,000 t, calculated as lithium metal, by next year, 2010. It is unlikely that this timetable will be kept by SQM in a severely depressed market already in oversupply, and even if new production is planned for other brine sources such as those in Nevada, Argentina, and Bolivia, as well as in China, none of this production can begin in less than 2 to 6 years, even if it were completely financed today, which is extremely unlikely in this market.

Ford at the moment offers no hybrids, plug-in hybrids, or electric cars utilizing lithium-ion batteries, and even if the company should immediately choose a lithium technology for development it will be years before the market has indicated whether or not short range plug-in hybrids have any hope of significant share, or whether or not the cost and performance of a lithium-ion battery technology can be justified well enough to be attractive to buyers.

Ford today, because of the above reasons has chosen to go forward with mass-produced hybrid vehicles utilizing proven, durable, long lived nickel metal hydride batteries, the costs of which today have tumbled to less than $3,000 at retail, less than 1/3 of the most optimistic projections for a mass produced lithium-ion battery!

Ford, however, although it is light years ahead of GM and Chrysler in vehicle electrification, is only third in the global race to produce hybrids based on nickel metal hydride battery technology, and its purchasing group has nowhere near the sophistication of global leaders, Toyota and Honda, when it comes to sourcing the rare earth metals lanthanum and neodymium, which are critical for the manufacturing of nickel metal hydride batteries and of the large electric motors needed to propel electrified cars.

The basic problem is that the global production of lanthanum and neodymium, both, are today entirely in China. In 2008 about 25,000 t of neodymium and 31,000 t of lanthanum were produced. Neither metal is in surplus and supply equaled demand in 2008.

Current production nickel metal hydride battery packs for the Toyota Prius use at least 12 kg of lanthanum each, perhaps as much as 15. But let’s simply use the 12 kg figure to illustrate Ford’s dilemma.

Toyota announced in 2008 that it intends to triple its production of nickel metal hydride battery packs for a Prius size vehicle, of which it will also triple production, by the end of 2011. This will bring Toyota’s production of battery packs and Prius size vehicles to 1,000,000 annually by the end of 2011. Honda has begun selling its Honda Insight “Prius fighter,” and says it hopes to sell 500,000 a year by the end of 2011. Ford will as of this May have four nickel metal hydride battery-using vehicles in its lineup, and projects total sales of these hybrids at 250,000 annually by the end of 2011.

Assuming the lower end figure of 12 kg per nickel metal hydride battery pack is correct, this means that there will be new additional production in 2011 of nearly 1.5 million hybrid vehicles using nickel metal hydride battery packs. There were about 0.5 million sold in 2008. most of them being Toyota Priuses.

The additional production of nickel metal hydride battery packs in 2011 for the additional vehicle production, will require an additional production of 18,000 t of lanthanum, which could only be done today by increasing Chinese total rare earth production by 72,000 t per year, since lanthanum constitutes only an average of 25% of the total of rare earths mined today, in China’s Bayanobo region. This would mean that Chinese production of total rare earths in 2011, would be nearly 37% higher than 2008 total production, the highest rare earth total production for one year in history.

Even if such an increase were possible, it is very unlikely that it would be done in China simply for the salvation of the product plans of Japanese and American vehicle makers.

It is possible that enough production could be brought on line outside of China, so that along with the expected Chinese increase, such a production goal, 18,000 t of new lanthanum production, could be reached, but this would require that recent events in Australia and California, which have halted production in Australia and slowed down a restart in California, could be reversed almost immediately. This shows no likelihood of happening.

Those who argue that lithium-ion batteries will obviate the need for any increase in nickel metal hydride batteries, seem to have ignored the fact that even if this silly conjecture were true, in the short term there would still need to be an increase in the production of neodymium for the permanent magnets of the electric motors to be used to propel electrified cars. Such an increase is as unlikely in the near term as is the needed increase of the production of lanthanum for nickel metal hydride batteries, and for exactly the same reasons – the massive increase in total output of rare earths necessary would in any case take many years to achieve, and without non-Chinese production being brought on line, is most likely impossible in less than a decade.

The conclusion is that electrified cars in large enough numbers to impact the market, could not be produced until at least the 2020s and then only if large non-Chinese sources are developed.

Lithium production increases for vehicle battery use is possible, if and when the demand is there, but the production of sufficient nickel metal hydride batteries and electric motors not only for vehicle propulsion, but also for wind generators, is and always will be limited by the peak of rare earth metals annual production.

Notwithstanding Mr. Mulally’s recent bold and unsupported-by-any-facts prediction of a majority of Ford’s vehicles being electrified in 10 years time, it is not possible for this to occur unless the Ford Motor Company were to obtain for its exclusive use, all of the increased production of rare earths in the next ten years, as well as most of the increase of the production of lithium, in the case that lithium-ion batteries prove to be generally useful in vehicle electrification.

Those who disagree with me usually use appeals to emotion and other such logical fallacies to do so, rather than quantitative information about total production and end use figures for rare earths and lithium.

I welcome debate on this topic, because I think that predictions such as those by Mr. Mulally are causing enormous amounts of money and time to be wasted, and are contributing to the downfall of the American OEM automotive industry. We need to understand that the overwhelming majority of motor vehicles which will be produced in the next 15 years, will be powered by internal combustion engines using gasoline and diesel fuels.

The electrification of the private passenger-carrying vehicle, unless it is by lead-acid battery technolgy, is a resource-limited fantasy if currently understood technologies are all taken into account.

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