Don't believe a word about electric cars and the coming lithium shortage

    Shai Agassi wants to put the world into electric cars whose batteries can be swapped out at one of his futuristic "gas" stations. But just as the cells in flashlights and laptops need lithium to run, so do -- swappable batteries or not -- electric cars. And some are now saying that will make lithium, in our increasingly battery-dependent society, increasingly hard to come by.

    There are rumblings in the press that the auto industry switching from petroleum to lithium is simply shifting from one finite resource to another, and even that the U.S.'s real reasons for invading Afghanistan were to secure its massive deposits of the alkali metal. Also, electric skeptics think there might be trouble accessing enough lithium to fuel the shift. Agassi, unsurprisingly, is not among them.

    "That was one of the biggest myths perpetuated by the oil guys," says Agassi, the founder and CEO of a company called Better Place, which is positioning itself as the architect of the network needed to support swappable battery cars and all the attendant infrastructure.

    According to the latest numbers from the United States Geological Survey (USGS), current producers are providing enough lithium to fuel the projected number of electric vehicles for the next ten years. After that, the major factor that will drive competition between players in the energy industry might not be mining lithium, but recycling it.

    It doesn't make sense, financially, to recycle lithium now. Producers are mining way too much of it for the demand. Lithium isn't currently used for car batteries in any significant way -- it's used for batteries in laptops, cell phones and cordless tools. All of these products took a hit during the recession, which meant a surplus of lithium existed in 2009, along with a fall in price. The only way the demand for lithium will surge is if electric vehicles roll out successfully in massive enough numbers to require a significant increase in manufacturing of lithium-ion batteries.

Battery surge

    Agassi wants to be the man behind that surge. His company, Better Place, is based on the principle that manufacturers don't need to wait for battery technology to improve to roll out consumer-grade electric cars. Instead, Agassi hopes to build networks of switching stations where drivers can change used batteries for fresh ones much like they fill up at gas stations now.

    Agassi has started to introduce the project in contained environments. Better Place has partnered with car companies Renault in France and Chery in China to build vehicles. In Tokyo this year, Better Place built a battery swapping station and deployed four electric taxis to demo that the system works. Israel should have a fully operative system by next year, says Agassi, who signed a deal with Renault to build 100,000 electric cars for Israel and Denmark by 2011. He's also planning to build networks in Australia and Hawaii.

    He's aiming high, and plenty of factors stand in the way of creating an automobile fuel infrastructure in a decade when the petroleum system took a century to create. However, it looks like lithium isn't one of the limiting factors.

    As of 2009, the U.S. had 2.5 million tons of lithium in reserve, and there were an estimated 23 million tons in other countries. Lithium-ion batteries for cars only need under 15 kilograms of the element per battery pack by a conservative estimate.

    "Producers right now will keep up with capacity in terms of the demand of the lithium," says Brian Jaskula, lithium commodity specialist with the USGS. He adds that producers are only at 60% right now, and if demand does increase, they've got plans in place to expand.

    Reports of large lithium reserves in Bolivia and Afghanistan have caused a stir in the media -- the idea being that there could be a resource grab for lithium in both countries. But foreign miners are unlikely to take the element from either place. Bolivian president Evo Morales won't sell Bolivian lithium, and Afghanistan is still too dangerous. But forecasted issues in these countries are based on the assumption that lithium will follow a similar pattern as another finite energy resource -- oil.