The plug-in hybrid electric vehicle (PHEV) market
stands poised to take off, but don't expect it to be an
overnight sensation, according to analysts following
developments in the industry.
"It's definitely going to be a very big market, but
not as quick to materialize as some people think," according to
Bradley Berman, who operates a consumer information Web site
(www.hybridcars.com) in Oakland, Calif. "There is no
lithium-ion battery on the market right now, so it will roll
out slowly. And all the manufacturers have problems as they
overpromise and underperform."
The leaders in developing lithium-ion batteries-the
gold standard because they are needed for advanced power
systems-are Japanese companies, including Moriguchi-based Sanyo
Electric Co. Ltd. and Panasonic (Matsushita Electric Industrial
Co. Ltd.), who are supplying Toyota Motor Corp., Honda Motor
Co. Ltd. and Ford Motor Co.
While there are small original equipment
manufacturers (OEMs) trying to play the game, the bigger
automakers will control the market, Berman said. "It's very
difficult for smaller companies to make a major breakthrough
due to the capital investment required, including stringent
crash testing and roadworthiness requirements."
And the technology is changing as well. "Nickel
batteries are what most hybrids are using today, but
lithium-ion has twice the energy and power density than nickel
and four times more than lead batteries, so battery technology
is moving towards lithium," said David Cole, head of the Center
for Automotive Research in Ann Arbor, Mich.
Automakers are looking to offset the weight of
heavy hybrid batteries, which can weigh several hundred pounds,
but dabbling with metals and other technologies for today's
vehicles isn't where the action is, one analyst said.
The real issue becomes whether or not there will be
enough lithium to go around, and for some the answer appears to
be a resounding "no."
Forget the battle for market share between steel,
aluminum and iron-the real crunch might come when lithium-ion
batteries hit mass-market production, according to Phil Gott,
director of automotive consulting at Global Insight Inc.,
Waltham, Mass. "You're already having people screaming that
we're going to run out (of lithium) by 2020 if the hybrid
market keeps going the way it is," he said.
General Motors Corp., for example, aims to have its
much-hyped Chevrolet Volt with a lithium-ion battery in
showrooms as soon as 2010.
The problem is, because lithium hasn't been in
great demand in the past, only easy-to-get and inexpensive
lithium resources have been exploited, Gott said. The situation
is similar to the 1920s, when people were loudly fretting about
running out of oil. "That was because we hadn't gone out
looking," he said. "If you start putting several hundred
lithium cells in several million vehicles a year, you change
Cole agreed that the problem isn't so much the
weight of the battery, but projected early costs of production.
"The obstacle to overcome is to get batteries produced at a
high volume and at a reasonable cost, because a lithium battery
costs more to produce than a traditional lead battery, although
the basic mechanics of a plug-in vehicle are simpler than
traditional vehicles," he said.
Oil companies are closely monitoring the
development of PHEVs, but probably won't get involved in the
manufacturing end of the business, Cole said. "They'll likely
invest in the technology to make sure they're not left out of
For the foreseeable future, PHEVs will remain a
niche market, even if all negatives are dealt with quickly, Kim
Korth, president of IRN Inc., Grand Rapids, Mich., said. "But
the more they make breakthroughs, the more concerned oil
companies become about higher gas prices threatening their
Increased demand also might increase the incentive
to search for more lithium, but some of the biggest potential
reserves are in countries like Bolivia, which are less than
enthusiastic about doing business with Western democracies,
As for the current generation of hybrids, they will
have smaller engines, use more copper wiring and generally
employ nickel-metal hydride batteries-but that's old news, he
said. "That's pretty obvious stuff. Any vehicle that's electric
in any way, shape or form is pretty much hampered by a battery
that's way too heavy and doesn't have enough power, so
automakers will all be going to lithium as soon as they
Even big vehicles like Chrysler LLC's Aspen and
Dodge Durango sport utility vehicles, currently available as
hybrids, could become all-electric if reliable lithium-ion
battery technology were developed, Gott said. The same is
probably true for a host of cars and trucks. "That's where the
But getting back to the present, how might nickel
prices be affected by all those nickel-metal hydride batteries
in today's hybrids? Those batteries are only an intermediary
step, Gott said, so even if nickel prices were to be an issue,
they wouldn't be one for long.
And those plug-in hybrids that are or will come
equipped with lithium-ion batteries also will use cobalt or
manganese and perhaps other metal compounds as well, said Mike
Omotoso, senior manager of global powertrain at J.D. Power
& Associates, Westlake Village, Calif. "The trick is to
find the right mixture to reduce the chance of a fire. Cobalt
is risky from what I understand," he said. "A lot of it is
proprietary information though, so we don't know what everyone
Michael Cowden, New York, contributed to this