BUDAPEST 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
"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
"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
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
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