Lithium News

What’s slowing down production of the Tesla Model 3?

Battery module production is one stumbling block, the company acknowledged last week. And while it’s unclear whether a shortage of lithium is part of the problem, Tesla is making moves to ensure it can access enough of the light metal — a growing concern for the entire industry.

Tesla reportedly has been in talks with Chilean lithium supplier SQM to invest in the company and secure a steady supply of the metal. Lithium is a key component in lithium ion batteries used to power electric vehicles, and its future supply could be a major concern for long-term battery production.

First, however, Tesla must address getting its current batteries off the line.

“Battery module production has been a limiting factor on Model 3 output,” Musk said last week on a call with analysts to discuss fourth-quarter earnings. The company posted a $675.4 million net loss for the fourth quarter of 2017, compared with a net loss of $121.3 million in the year-earlier period, largely due to problems ramping up production of the Model 3. “We were a little overconfident and complacent in thinking this is something we know and understand.”

Tesla’s battery struggles show that the massive transition to electric vehicles won’t be without significant hurdles. Much of the demand for lithium is taken up by the consumer electronics industry. As automakers ramp up plans for EVs, lithium demand is expected to hit new highs, and competition for lithium will soar.

That means manufacturers need to secure strong supplier relationships with lithium producers in the short term or brace for major price fluctuations.

“In the last two years, lithium production has not been enough to meet demand. As a result, lithium stockpiles have diminished,” said James Frith, an energy storage analyst at Bloomberg New Energy Finance, adding that producers have been working to replenish supplies to meet demand during the next five years.

By 2030, demand is expected to hit 250,000 metric tons a year, up from less than 50,000 metric tons in 2017, “so the industry will need to keep ramping up production,” Frith said.

Sanford C. Bernstein & Co. estimates companies will have to spend between $350 billion and $750 billion to find and develop new lithium mines to support this rising demand.

Increasing demand

SQM said it does not comment on specific customers, but it has been in talks with automakers to play a “more active role” in the supply chain.

Supplies of the metal can be difficult to predict because of the variety of ways it can be produced. Lithium is primarily mined in Australia through a process called hard-rock mining, which produces the metal in weeks, or in South America through brine mining, which is cheaper but can take up to two years.

Tesla, General Motors, Nissan Motor Co. and Chinese automakers are the primary companies producing fully electric vehicles, but in the last year, automakers from Volvo Cars to Ford Motor Co. to Mercedes-Benz have pledged to beef up their EV offerings in the next five years. And those numbers are expected to rapidly increase in the next decade — Bloomberg New Energy Finance projects EV sales to reach 24.4 million by 2030, compared with global sales of just more than 1 million now, according to Navigant Research.

These commitments have yet to include supply chain plans for increased battery production, begging the question of whether lithium supply can keep up.

“No major automaker has yet got a lithium contract in place that is consuming supply,” said Simon Moores, managing director of Benchmark Mineral Intelligence, a data collection company focused on the lithium ion battery supply chain. “This means that it becomes a longer-term issue.”

Securing supply

The price of lithium has increased steadily as products powered by rechargeable batteries have gained popularity — up to $290.19 per ton in January 2018 from $134.16 per ton in January 2016, according to data from Benchmark. These costs could continue to soar for automakers unless they land long-term agreements, Moores said.

And so automakers are starting to stake claims in long-term agreements, even taking equity positions in new projects, said Daniel Jimenez, commercial vice president of iodine, lithium and industrial chemicals at SQM.

“It seems very likely that OEMs will continue in this trend of securing themselves lithium assuming a role that, so far, has been in the hands of cathode and battery manufacturers,” he said.

Last year, Chinese automaker Great Wall Motors took a 3.5 percent stake in Australian lithium producer Pilbara Minerals, and in January, Toyota Motor Corp. invested in Argentinian lithium mining company Orocobre. These new relationships are a departure from the traditional roles of component producers, Moores said, and could take time to work in the automakers’ favor.

“The reality is this should have been done two to three years ago,” Moores said. “The sellers have the purchasing power right now, not the buyers; especially big new buyers looking for significant volumes.”

Few alternatives

In June 2016, Musk called lithium “the salt on the salad,” saying nickel and graphite make up most of a battery cell and lithium makes up just about 2 percent of a lithium ion battery.

However, automakers’ recent investments suggest lithium may be more than just a sprinkling for batteries, and automakers may be left with few options if there isn’t enough.

K.C. Chang, a senior economist at IHS Markit, said there’s no current replacement for lithium in rechargeable batteries, but if faced with shortages or other risks to supply, automakers could be incentivized to explore the development of other components. Supplier pricing also will be a major driver of whether lithium alternatives or processes such as battery recycling will get more attention.

“This is still an industry trying to find a better sense of direction,” Chang said. “If producers charge too high a price, OEMs will look for alternative battery chemistries. The results of these negotiations are going to be a signpost of how quickly or slowly EV adoption will evolve on a global basis.”

Lithium substitutes may not be so easy to find. Frith said the metal’s value lies in its ability to provide a high amount of energy in a lightweight package. Alternatives using calcium or magnesium are being developed but are in the beginning phases.

“It has taken more than 50 years to develop lithium ion batteries to the point that they are now at, so don’t expect any of these early-stage technologies to hit the market anytime soon,” he said.

Do you think innovations like yours can positively impact the free market?“Constitutional Conservative with an MIT Pedigree” congressman Thomas Massie (R-Ky.) posted a YouTube video over the weekend illustrating how he recently experimented with powering his entire home off of a used Tesla car battery.

Massie converted a salvaged Tesla Model S battery to run his already off-the-grid home in Kentucky, using the proprietary Tesla battery management system to provide power for him and his family.

We thought this was an unusual accomplishment for anyone, particularly a Republican member of Congress with well-known libertarian leanings. Rare, a national news website that features politics and culture, talked with Massie about this project, asking him to shed some light on how the system works, as well as how he thinks new innovations like his positively impact the free market.

How long have you been doing this, and how did you get the idea?

MASSIE: “My family and I have been living off the grid for over a decade now. The solar panels work great, but the lead-acid batteries have always been the weak link in our system. For instance, in the past we chose not to run our air conditioner at night because it would cause our old batteries to fail sooner.

“I’ve been driving a Tesla for five years and have always wanted to have a battery in our house that works as good as the battery in our car. I was hoping to buy a Powerwall from Tesla, but they don’t sell one yet for ‘off-the-grid’ applications.”

Does this save any money compared to powering a house off of an electric grid? How much does it cost?

MASSIE: “Living ‘off the grid’ is still more expensive than living connected to the grid, but a good battery can change that equation. By replacing our lead acid batteries with lithium batteries from a wrecked Tesla, I’ve lowered our cost of storing electricity for nighttime use from 25 cents per kilowatt-hour to about 12 cents per kilowatt-hour. That’s getting close to the retail price of electricity from the grid.”

Do you think innovations like yours can positively impact the free market?

MASSIE: “When you go off the grid, you have more choices for where to build your house. Land that wasn’t developable because of a lack of access to public utilities suddenly becomes viable by going off the grid. Plus homeowners won’t have to run wires across their neighbors’ land.

“Installing batteries in homes will create a market for used electric car batteries, which will support the resale value of electric cars. This will ultimately lower the lifetime cost of owning an electric car for transportation.

“Whether houses have solar panels or not, and whether houses are connected to the grid or not, I think every house will eventually have a large battery in the future.”

A huge hybrid solar and battery storage microgrid has been revealed as the power source for the revamped South Australian Produce Market, as part of a state government-backed initiative that is expected to save stallholders more than $500,000 a year on their power bills.

In an announcement on Sunday, state energy minister Tom Koutsantonis said his government had granted $2.5 million towards the construction of a 2.5MW solar PV array, coupled with 4.2MWh of Tesla lithium-ion battery storage and a 2.5MW onsite diesel generator at the wholesale fruit and vegetable facility in Pooraka, northern Adelaide.

The $10.5 project is expected to generate enough electricity to power the equivalent of 4,500 houses, thus supplying all of the wholesale market’s energy needs, while feeding surplus power into
the grid.

The microgrid, which will cut greenhouse gas emissions from the site by 2,637 tonnes a year, is also expected to save market stallholders up to $5.5 million over the next 10 years, compared to the current retail power supply offers available in the state.

The huge project – which stands to deliver the state’s largest single commercial solar array – was announced on the same day as the Weatherill government’s plans to build the “world’s biggest” virtual power plant in the state, linking 50,000 homes, each with 5kW rooftop solar and a Tesla Powerwall 2.

As Giles Parkinson reports, the $800 million project will ultimately bring together 250MW of capacity and 650MWh of storage, allowing the combined resource to be pooled to help provide grid stability and extra capacity when supply is short.

“This Labor Government is committed to delivering more renewable energy and cheaper power prices, and this week we will be making of range of renewables announcements that will put downward pressure on power price for all South Australians,” said Koutsantonis, in full campaign mode with the state election looming in March.

“Pairing solar panels with batteries not only reduces power costs for businesses, it also reduces demand on the grid, putting downward pressure on power prices for all South Australians.

“South Australia is at the forefront of advances in the deployment of this technology and projects like this one at the SA Produce Market demonstrate how much can be saved by investing in solar and
batteries,” he said.

The microgrid project is part of a $25 million upgrade at the SA Produce Markets, which the facility’s CEO Angelo Demasi hopes will wind up something like a much smaller version of the world’s largest produce market at Rungis, in southern Paris.

“We thank the South Australian government for the funding and support to ensure we can provide environmentally sustainable energy to our stallholders,” Demasi said on the weekend.

“We want to ensure we can continue to provide affordable fresh produce on a local and global platform and this initiative means we can do it with an environmentally friendly and cost-effective manor using an innovative solution,” he said.

In New South Wales, Sydney Markets has also turned to solar to cut the costs of stallholders, with a series of PV installations that have added up to a total capacity of just under 1MW, mostly on purpose-built solar car parks.

The most recent addition, a 640kW array built on a $14 million industrial scale solar car park took the facility’s combined solar capacity to 910kW, which as well as slashing its energy costs by hundreds of thousands of dollars a year, would allow Sydney Markets to trade excess renewable electricity generated to like-minded companies.

The SA markets microgrid is expected to be fully operational by late 2018 and will create about 40 jobs during construction. The solar and storage will be governed by control system developed by energy management company AZZO, the same company behind the design and implementation of a cloud-based utility monitoring and visualisation system at the Melbourne Cricket Ground.

With continual technological advancements in mobile devices and electric cars, the global demand for lithium has quickly outpaced the rate at which it can be mined or recycled.

A University of Texas at Austin professor and his research team may have a solution.

Benny Freeman, professor in the McKetta Department of Chemical Engineering in the Cockrell School of Engineering, and his colleagues at the Monash University Department of Chemical Engineering and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia have recently discovered a new, efficient way to extract lithium and other metals and minerals from water. They published their findings in the Feb. 9 issue of Science Advances.

The team’s technique uses a metal-organic-framework membrane that mimics the filtering function, or “ion selectivity,” of biological cell membranes. The membrane process easily and efficiently separates metal ions, opening the door to revolutionary technologies in the water and mining industries and potential economic growth opportunities in Texas.

The Barnett and Eagle Ford shale formations in Texas contain high amounts lithium, and the produced wastewater generated by hydraulic fracturing in those areas has high concentrations of lithium. Instead of discarding the produced water, the team’s membrane filter could extract the resulting lithium and put it to use in other industries.

At least one company, Standard Lithium of Canada, plans a pilot plant in South Arkansas to extract lithium from Smackover Formation brine.

“Produced water from shale gas fields in Texas is rich in lithium. Advanced separation materials concepts such as ours could potentially turn this waste stream into a resource recovery opportunity,” Freeman said.

Each well in the Barnett and Eagle Ford can generate up to 300,000 gallons of produced water per week. Using their new process, Freeman and his team conservatively estimate that from just one week’s worth of produced water, enough lithium can be recovered to power 200 electric cars or 1.6 million smartphones.

In addition, the team’s process could help with water desalination. Unlike the existing reverse-osmosis membranes responsible for more than half of the world’s current water desalination capacity, the new membrane process dehydrates ions as they pass through the membrane channels and removes only select ions, rather than indiscriminately removing all ions. The result is a process that costs less and consumes less energy than conventional methods.

The team’s material operates on principles inspired by highly effective biological cell membranes, whose mechanism of operation was discovered by Roderick MacKinnon and Peter Agre and was the subject of the 2003 Nobel Prize in chemistry.

“The prospect of using metal-organic frameworks for sustainable water filtration is incredibly exciting from a public-good perspective, while delivering a better way of extracting lithium ions to meet global demand could create new industries,” said Anita Hill, CSIRO’s chief scientist.

Funding for this research was provided by the Australian Research Council, the Australian-American Fulbright Commission, the Commonwealth Scientific and Industrial Research Organization and the National Computational Infrastructure in Australia.

The researchers used tin oxide nanocrystals supported on a graphene structure to vastly improve the battery. The team explained that technology also could be used in lithium-ion batteries, making it more attractive for manufacturing.

In sodium batteries, sodium-ions, rather than lithium-ions, travel back and forth between the battery’s anode and cathode to produce electricity. Sodium batteries are not able to hold as much energy, but their low cost makes them attractive for mid- to large-scale energy storage systems, such as for storing energy from solar power or wind farms. Manufacturers are also looking for ways to manufacture both lithium and sodium-ion batteries with only one type of anode material.

Using tin oxide in a battery’s anode gives it the potential to store almost three times the energy of graphite that is typically used in batteries, and it’s easy to make. However, tin oxide wears out quickly and stops working. In their study, the researchers were able to solve the degradation problem by making ultrafine nanocrystals of tin dioxide that were tightly bound to a three-dimensional graphene structure. Their hybrid structure was reportedly robust, well connected and porous, allowing for better transport of electrons and ions.

Their research shows that the material greatly improved the charging capacity and rate of both types of batteries, and the hybrid material “exhibited outstanding electrochemical performance,” according to the team. The researchers also tested the materials in a full battery.