How much is lithium batteries dependent on oil?

[swbluto]

Hello, how dependent are lithium batteries on oil? I know that the minerals have to be extracted somehow, but much do material costs make up the cost? I also know that batteries have to be shipped so they have their associated shipping cost, but how much of the process is "necessarily" dependent on oil and how much of it is dependent on energy that could be substituted with electricity?

I just want to have a good idea what the price dynamic will be for lithium batteries with a possible oil price crisis. It seemed like batteries were commanding high prices during the one of 2008, but it didn't seem the subsequent price drop was that dependent on oil (Oil prices dropped by 3 times or more yet battery prices only dropped by 1.2 - 1.3 times.).

 

[amberwolf]

I'd say they're more likely to go up simply because demand for battery-powered stuff will go up in such a crisis. Not necessarily for EVs, but also for homes, backup power, "retreatists", etc.

 

[swbluto]

I'd say they're more likely to go up simply because demand for battery-powered stuff will go up in such a crisis. Not necessarily for EVs, but also for homes, backup power, "retreatists", etc.

Well, yeah, I guess a crisis wasn't what I meant to say. I guess I meant a "time of relatively high oil prices", because I'm trying to find out how much the production costs would be affected by oil's pricing which, with a market with many competitors, the market price would approach (It'd approach the production and distribution costs) given enough time assuming the supply of lithium and other required resources is plentiful.

 

[jonescg]

I'd say look up any salt-pan mineral resources company and request some information on their costs of production. I know magnesium mining would be similar in terms of logistics / electrochemistry, and therefore similar oil/coal requirements for extraction. Aluminium is probably the worst for energy consumption as Al3+ needs three moles of electrons to reduce it to Al. Compared to Mg2+ or any of the alkali metals, that's a big energy and hence price differential.

 

[swbluto]

Looking at metal price charts are a pretty good way to find out what how much oil influences their operations. For example, copper and iron's cost pretty much reflected oil prices and they ended up tripling and quadrupling during the oil price spike of 2008. So... I looked up magnesium costs and found a historic chart at http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=3y&c=cmagnesium.xusd.ukg and it appears that the magnesium price tripled during the oil price spike. So, it appears lithium and iron costs would likely reflect the cost of oil. However, how much do mineral extraction costs matter for the cost of lithium batteries? I believe most of the cost of lithium batteries is in baking the lifepo4 and powering the processing equipment and whatever else, and I believe that could be powered by electricity, so it'd theoretically be less susceptible to oil price shocks but I don't really know how much. I don't manufacture lithium batteries.

So, I'm going to guess... it appears lithium would likely reflect a third to half of oil's price on a production cost basis. So, if the price of oil doubled, then I might expect the price of lithium batteries to go up by 1.333 to 1.5 times as much. So, it appears that lithium batteries at current levels aren't going to be the "cure all" for oil shocks with electric cars. If oil becomes fairly expensive, it seems likely electric cars will become so too, so it appears cars in their current form in general will become a luxury if oil becomes absurdly expensive.

 

[olaf-lampe]

Beside the raw materials, what about the plastic case and the foil of the pouches? Isn't it all oil dependent?
How much oil is needed to make the copper- and Alu-foil for the electrodes? They won't heat up the metall with sunlight, would they?
OTOH, who believes we will pay a battery price that is related to production costs? The last oil price drop showed it clearly: it was just a bubble...They'll ask a price, we'll be willing to pay.

-Olaf
PS: Same rules for electricity. We only feed another shark .

 

[swbluto]

Beside the raw materials, what about the plastic case and the foil of the pouches? Isn't it all oil dependent?
How much oil is needed to make the copper- and Alu-foil for the electrodes? They won't heat up the metall with sunlight, would they?
OTOH, who believes we will pay a battery price that is related to production costs? The last oil price drop showed it clearly: it was just a bubble...They'll ask a price, we'll be willing to pay.

During a bubble, you're right to an extent. But during prolonged periods of high cost, and assuming many competitors and plentiful lithium supply, the price would converge to the production costs over time.

As far as heating up things which makes up a lot of the cost, I thought heating processes were powered by electricity which is further powered by coal as of now? However, coal extraction costs itself might depend on oil. Looking at the historical coal prices at http://geology.com/news/wp-content/uploads/a-misc/coal-prices-august-09.gif, it very well appears that coal prices coincide quite well with the oil prices. So, the heating associated costs of lithium battery material would likely be correspondent with oil costs, indeed. So, it seems lithium batteries would have a cost relationship with oil greater than .5 to 1 than I originally predicted. Maybe.... .67 to 1. If oil increased in price by a multiple of ten, lithium battery costs would increase by 6.7 times.

 

[auraslip]

I've had people tell me that nuclear power is bad for the environment because of how much oil is used during the mining for fissionable materials.

I am sure lithium is the same way.

35mpg highway.

Then you got transportation like you said. Transportation to the factory to be made into batteries. And then the cost of transportation for all the other materials. And then the cost for all the factory employees to drive to work. And then the transportation to the dealers. And then the last mile transportation to the door.

When oil goes up, the cost of everything goes up.
Lithium will go up more though because of demand for EV vehicles.

I too saw that military report about an oil shortage by 2015. I'm wondering if I should start hoarding batteries and buying stock in lithium companies.

 

[swbluto]

I too saw that military report about an oil shortage by 2015. I'm wondering if I should start hoarding batteries and buying stock in lithium companies.

Given that the lifespan of lithium batteries is limited and that my projections suggest that shortages would occur somewhere between 4-7 years from now (6 years being the "safe bet") and the predicted "electric car battery" glut that some predict around 2012 (it may not happen depending on how the public's knowledge changes), I think sometime around 2012 and 2013 may be the best time to invest in lithium batteries for personal usage. That should last approximately 10-15 years? By that time, hopefully a breakthrough will occur. If not, you'll just be phucked like everyone else.

If a shortage does not genuinely occur, then you just got a lot of range and what's so bad about that?

But, it seems like electric bikes are exploding in popularity from now, so lithium battery prices may not actually be that low in 2012 but it'd certainly be lower than what it would be in the event of a true shortage (Assuming there isn't a shortage in 2012).

 

[olaf-lampe]

I agree that competition regulates the price, but I have my doubts that chinese manufacturers, really are 'independent'. There is always a government 'consultant' around. Other countries that are in Lithium battery business can't compete the low prices from china, so far. Which actually looks like a chinese monopole to me. *gulp*

-Olaf
BTW, did you know that china was the biggest coal exporteur over devades and now they started to import coal?!

 

[jonescg]

Yep! And they're buying A+ grade Aussie coal! The Queensland Premier recently gave the 'green' light to developing the worlds biggest coal mine near Emerald, Qld. Wow. Talk about pretending to care about the environment on one hand and pillaging with the other.

 

[bearing]

Sure, lithium-ion batteries are dependant on oil. But they are of course most dependant on the lithium metal.
Will the world supply of lithium be enough when we convert to electric vehicles?

I found these reports:
The Trouble with Lithium
The Trouble with Lithium 2

"Analysis shows that a world dependent on Lithium for its vehicles could soon face even tighter resource
constraints than we face today with oil."

 

[olaf-lampe]

Sure, lithium-ion batteries are dependant on oil. But they are of course most dependant on the lithium metal.
Will the world supply of lithium be enough when we convert to electric vehicles?

I found these reports:
The Trouble with Lithium
The Trouble with Lithium 2

"Analysis shows that a world dependent on Lithium for its vehicles could soon face even tighter resource
constraints than we face today with oil."

Opposite to oil you can recycle old Li-XX-batteries. For now Lithium is cheap enough not to be recycled. There are huge areas in Bolivia and in China, where you literally stumble across it's salted form.

You can start collecting old Li-batteries and wait until the price raises
Olaf