Lithium batteries power hybrid cars of future: Saft

BUDAPEST Thu Jun 21, 2007 8:19am EDT

In this file photo an exhibitor displays Honda's Civic Hybrid MX at an exhibition of the International Battery, Hybrid and Fuel Cell Electric Vehicle Symposium & Exposition in Yokohama, south of Tokyo, October 23, 2006. REUTERS/Kiyoshi Ota

In this file photo an exhibitor displays Honda's Civic Hybrid MX at an exhibition of the International Battery, Hybrid and Fuel Cell Electric Vehicle Symposium & Exposition in Yokohama, south of Tokyo, October 23, 2006.

Credit: Reuters/Kiyoshi Ota

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BUDAPEST (Reuters) - Lithium-ion batteries are the most promising electricity source for environmentally friendly hybrid vehicles, with the potential to eclipse now dominant nickel technology, French battery maker Saft said.

Lithium-ion batteries are lighter than nickel-metal hybrid ones used in today's commercial hybrid cars -- gasoline-powered vehicles with an additional electric motor.

Another possible raw material, lead, is the heaviest of the three.

"We have always thought that at some point lithium-ion will take over from nickel-metal hybrid in vehicles because it's smaller, lighter, it's got more power, it's more compact," Saft Communications Director Jill Ledger told Reuters.

"This seems to be happening a little bit quicker than we thought," she said on the sidelines of a conference on battery recycling late on Wednesday.

Saft had won a contract to supply lithium-ion batteries for a vehicle which will go to market at the end of 2008, the first such commercial vehicle in the world, she said.

There are few suppliers of lithium in the world -- Chile is the main producer -- but Ledger said there were unexploited sources outside South America which would ensure enough metal for the rapidly growing hybrid vehicle market.

In 2006, the battery industry consumed 12,000 tons of lithium, which represents around a quarter of total output.

"There is plenty of lithium in the world," she said. "It's just that there is a huge supply in South America and everyone is getting it from South America."

New sources could include North America and Russia, she said.

COLOSSAL POTENTIAL

"Even if everything changed to lithium then apparently there is not a problem with supply."

Besides weight, another drawback of nickel-metal hybrid is the high cost of nickel, even after sharp falls in its price recently, she said.

Three-months nickel futures on the London Metal Exchange is trading at around $36,200 a ton, down from an all-time high of $51,800 hit in May. A hybrid car battery contains of some 10 kilogram of nickel, around a quarter of the total weight going into the most sold hybrid - the Toyota Prius.

A lithium-ion battery weighs around half of a nickel-hybrid battery, which makes the vehicle even more fuel efficient.

The price of lithium has risen to $7,800-8,500 per ton on the spot market, up from around $7,000/8,500 in March, a European producer said.

Lead producers also want to benefit from the booming hybrid market, but Ledger said that metal was not an option because of its weight.

Saft has formed a joint venture with Johnson Control to develop batteries for hybrid vehicles. More than 500,000 such cars are expected to be produced this year, up from about 400,000 a year ago, she said.

"That is the market where all the studies show there is absolutely colossal potential, it could absolutely explode."

Panasonic, the main brand name for products made by Japanese electronics giant Matsushita is the world's largest supplier due to its joint venture with the leading hybrid producer Toyota. It uses nickel-metal hybrid.

"We'd like to be the number one Western player," Ledger said.

Saft, which also makes batteries from nickel and silver, also sees great potential in disposable lithium batteries used in utility meters, especially in parts of Asia where few homes have gas or water meters yet.

"We've batteries for the whole of Beijing so they can put meters in their homes and start metering their water," Ledger said.

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