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Comment by dangrossman | Hacker News Reader

> Perhaps we will, given the ramping production, but if they don't move more or less in step, prices could be somewhat stubborn

There's somewhere in the range of 35-50 gigawatt-hours (GWh) of annual lithium ion battery production capacity at existing manufacturing facilities worldwide right now. By 2020, under three years from now, that will triple or quadruple to 150-200 GWh, based on new factories that have broken ground or money already committed to expansion from BYD (20 GWh), Boston Power (10 GWh), LG Chem (7 GWh), CATL (50 GWh), Panasonic/Tesla (35-50 GWh), Foxconn (15 GWh), Samsung SDI, SK Innovation, and others. Given how long it takes auto manufacturers to take new cars to market and grow their sales (years) and how few are actually far along enough to hit the market in the next year or two, I don't think the supply side of the battery market will have any trouble keeping up with demand. It may even be too much, lowering prices.

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The Lithium-ion battery market has already hit PCB manufacturers, by taking up copper foil used in printed circuit boards.

http://globalsmtseasia.com/industry_news/copper-crisis-looms...

"The problem is not that there is not enough copper in the world, but its conversion to copper foil that is the problem." That's only ever going to be a very short term problem.

What's a good company to invest in here? Panasonic? Trouble is that lithium batteries are a drop & their bucket. BYD? (I thought BYD was just LiFePo4. better for storage not so much for cars. Though they make busses.)

Some believe Tesla is properly described as a battery company instead of a car company. Their valuation is high for current sales though, obviously investors are buying on growth potential. Regretting selling my shares.

Our experience with LiFePo4 is they are slightly cheaper at the cost of performance. If batteries make up the bulk of the cost of a BEV they would probably be the best choice for general fleet vehicles.

BYD also makes cars. You can buy this one in the US https://en.wikipedia.org/wiki/BYD_e6 and it was apparently the best-selling EV model in China in 2016.

Stanford owns some of their buses.

Wait until the "OPEC" of lithium emerges from the coming price wars... If you don't think that will happen, I have some land in Yuma, Beach front.

Cartels are unstable by their nature, OPEC is the exception not the rule. Cartels can only thrive when there is a lack of competition and strong enforcement between member nations. There is a reason why we don't hear of coal or natural gas cartels which are substitute goods for oil.

Even OPEC is not much of an exception: they've only occassionally been effective at coordinating outputs, and supply dynamics typically overwhelm OPECs ability to respond.

OPEC is definitely an exception in that it stayed together even though there are multiple times when it wasn't clearly in any of the members' economic best interests to participate or maintain the cartel's supply control. This is pretty obviously because it's a political rather than economic organization: the member states have political reasons for wanting to remain in control of the supply which probably exceed the rational reasons for pursuing revenue maximization.

It seems unlikely that the countries with significant lithium reserves have enough in common politically, to maintain a similar cartel.

Not that some might not try. But they will also have to deal with the fact that OPEC did it first, and major powers may be unlikely to allow that to be repeated.

OPEC may exist as an organization but its members generally don't abide by quotas.

Highly unlikely. Lithium is one of the cheapest and easily-supplied materials required. By some measures a larger percentage of world cobalt production is used for batteries than lithium.

Lithium and cobalt are both in high supply in almost all countries, unlike oil.

If lithium is abundant in so many countries, why is it mined in so few?

Compare: https://en.wikipedia.org/wiki/List_of_countries_by_lithium_p... https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...

Wikipedia isnt exhaustive but the real reason is that hard rock deposits, primarily spodumene, are only economical at high volumes. Spodumene is present basically everywhere hard rocks are. Lithium brine, which makes up almost all of all current battery lithium, exists almost totally in three countries.

Well, ok, but that contradicts your statement that Lithium is available in almost all countries.

It is only "available" in all countries if those countries want to pay an extremely high price, right?

"Extremely high" requires the qualification that it's only high in comparison to the current market price, but not high in the sense that it makes use in batteries uneconomical.

Currently, a very small proportion of the cost of the battery is lithium. As battery production increases, the market price of lithium will go up, potentially by several times. This will make spodumene deposits economical to extract, but it will not have a meaningful effect on the cost of the batteries.

The preliminary work to open these deposits for extraction has started in many countries, for example the Keliber project in Finland is currently undergoing the environmental effect study.

http://keliber.fi/

This line of reasoning supports the original comment they reply to that you can't count on battery prices to drop. Even if costs aren't substantial enough to affect EV sales, eventually batteries will need replaced.

I like the concept of EVs, but there are still 2 problems I can't get over. The first is that the environmental impact of building the car doesn't get much coverage and focus is on the impact of running the car. Are they really good for the environment? Who knows. The second is that recharging still takes too long and so I would want some type of range extender which bring oil back into the picture.

> This line of reasoning supports the original comment they reply to that you can't count on battery prices to drop.

No, it doesn't. The cost of lithium in the batteries is such a minor expense, that changes in lithium prices cannot move the price of a battery in either direction. The batteries are getting cheaper because of reasons unrelated to lithium, and even if the price of lithium were to quadruple from present levels, these other factors would totally dominate the price of the battery.

If something is currently 1% of a price of a good, and it quadruples in price, it can at worst cause a 3% move up in the price of the good. If, at the same time, a different reason causes the price of the good to fall 40%, this 3% move up hardly registers.

There are plenty of studies of the life-cycle environmental impact of electric cars. They get mentioned on HN on occasion.

As for recharging time, have you ever talked with a Tesla or Bolt owner?

No I haven't, I have never known a person who owns either. However, a quick search confirms my suspicions that it takes significantly longer to charge batteries than to fill a gas tank. A journey that takes more than 1 recharge would be considerably more difficult than the same trip in a gas car.

>The first is that the environmental impact of building the car doesn't get much coverage and focus is on the impact of running the car.

Here is a first order analysis: A car that travels 200,000 miles in its life @ 30 mpg (nation avg is 25.5) will burn 6667 gallons of gasoline, weighing 42,000 lbs. The weight of the gas burnt is over 14x more than the weight of the car. Those 6667 gallons produce 133,340 lbs of CO2. The average car burns its own weight in gasoline in 12,000 miles, less than a year of driving.

Here is a more complete analysis: http://www.ucsusa.org/sites/default/files/attach/2015/11/Cle...

«The first is that the environmental impact of building the car doesn't get much coverage and focus is on the impact of running the car.»

From what I've seen it gets far too much coverage because it seems like one on the many list of excuses why electric cars are "just as bad" as ICE cars.

The key part being that "just as bad": the vast environmental impact of building a car will always be the steel/aluminum/plastics of the frame and interiors. That doesn't really change no matter what sort of car you buy, except that obviously bigger, heavier cars have more impact than smaller ones and electric cars typically have the most incentives to be small and efficient in frame size and cabin weight, too.

Yes, batteries have a slightly different environmental impact at build time than a traditional gas engine, but they are more easily recycled too. Don't forget the environmental impacts of oils and lubricants and coolants used for all those moving parts in a traditional and randomly spilled across the pavements of a city and constantly (every few months) topped up or replaced. Operating environmental impact is hugely different, and that probably matters a lot more than the build time environmental impact.

No. High volume, not high price. About a third of lithium is mined as hard rock currently, for about the same price as brine. The individual mining operations just have to be large.

Thanks, that makes sense to me.

I don't know a ton about mining history, but it seems that mining has always depended on cost efficiency. ("Duh?") eg, Froth floatation mining is the only reason that a ton of gold mines in the Pacific NW were ever cost effective, and formerly closed mines reopened as the technique came into use.

Can only assume that as the price and demand on various precious metals change, the techniques and regions which can produce them economically will change as well.

That's correct. The basic difference between brine and hard rock is that brine is simple to purify but can't be extracted any faster than lithium salts dissolve into water. Benefication and purification of hard rock lithium requires big grinders, flotation and acid baths, essentially the same process as mining any other metal. To justify building all that you need to be able to sell a lot, but once you do the cost is totally amortized.

As an extreme example, coal mining in the US is so efficient that each miner produces 55 tons of coal per day. That kind of efficiency is enabled by the scale and investment.

Current lithium sources are "easy pickings" and low-startup. It's like a single guy panning for gold by hand. He's just doing it for the chance at a buck, where gold is very convenient. Spodumene mining is froth flotation.

How many industries industries are currently controlled by cartels? Maybe OPEC in oil and DeBeers in diamonds. But even in those cases, the cartels still have limited overall effects. OPEC has trouble policing its members, and DeBeers has competition.

Why do you think that lithium producers will be able to form a cartel, when almost no one else can?

> If you don't think that will happen, I have some land in Yuma, Beach front.

Talk is cheap, and staying stuff like this makes you just look foolish.

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