Carnegie Mellon: Lithium Fluctuations Unlikely To Impact Battery Prices

2 years ago by Mark Kane 8

Lithium-ion battery production at Nissan Sunderland Plant

Lithium-ion battery production at Nissan’s Sunderland, UK Plant

Lithium market fluctuations unlikely to significantly impact battery prices (source: Carnegie Mellon University)

Lithium market fluctuations unlikely to significantly impact battery prices (source: Carnegie Mellon University)

A recent lithium price increase, and its impact on battery prices, were the topic of the new study at Carnegie Mellon University.

CMU reassures us that more expensive lithium isn’t such a big deal as one would might have thought, even after recent articles focused on controlling the cost of the material at BYD and for the Tesla at the Gigafactory.

“Global lithium prices have more than doubled over the last six months as battery producers scramble to secure purchasing rights from an increasingly consolidated number of lithium producers, who find themselves able to demand premium pricing as a result of a delay in bringing more lithium production capabilities online. This could be particularly concerning for the manufacturers of lithium-ion cells for electric vehicles. To address this, a new Carnegie Mellon University College of Engineering study has found that even large increases in lithium prices are unlikely to significantly increase the cost of batteries or battery packs for end users such as vehicle manufactures or consumers, though some manufacturers may see reduced profit margins.”

Even prices four times higher than the historical average would not increase the battery cell prices more than ~10%.

Higher lithium pricing still isn’t good news, but it is not a threat to future plug-in vehicles’ success on the open market.

“The Carnegie Mellon University team, whose study was published in the Journal of Power Sources, analyzed multiple lithium-ion battery chemistries and cell formats to see whether extreme lithium price variations would have a substantial impact. They examined the impact on cell costs if lithium prices increased to $25/kg, more than four times the historical average, and found that lithium is a relatively small contributor to both the battery mass and manufacturing cost.

“Although the battery cost increases were the largest for high power-density cells, which require a lot of material inputs, cell costs never increased more than 10% even using the most extreme assumptions,” says Rebecca Ciez, an engineering and public policy Ph.D. student.

While this is not a large percentage of total costs, it could be significant for lithium-ion battery manufacturers, like those who manufacture batteries for electric vehicles and operate on slim or negative profit margins.”

On the other hand, at higher lithium prices, there will be more economically viable ways to extract lithium in various countries.

“The paper also addresses a secondary issue: some investors urge researchers to come up with alternatives to lithium due to shortages.

“Lithium is plentiful, and our current sources are not the only sources of lithium—they are merely the cheapest. If prices do quadruple, it becomes, in principle, economical to extract lithium from sea water,” says Jay Whitacre, professor of materials science engineering and of engineering and public policy.

For battery manufacturers concerned about the long-term future of lithium-ion batteries, Whitacre says, “There are many other reasons to pursue different battery chemistries, but access to lithium resources is not one of them.””

source: Carnegie Mellon University

article: The cost of lithium is unlikely to upend the price of Li-ion storage systems

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8 responses to "Carnegie Mellon: Lithium Fluctuations Unlikely To Impact Battery Prices"

  1. Someone out there says:

    I remember some episode of Fully Charged on Youtube where someone (Robert?) said that the battery pack in the LEAF (24 kWh) only contained 4 kg of lithium! Clearly lithium is not a huge problem.

  2. pjwood1 says:

    WSJ naturally left open the idea lithium supplies could be a problem, for Tesla.
    http://blogs.wsj.com/moneybeat/2016/05/05/how-tesla-is-shaking-up-metals-markets/

  3. jerryd says:

    While their lithium prices are right the rest is way off.
    They only weigh 15lbs/kwhr and most of it is plastic, alum, Copper, carbon which is all under $4/lb including lithium carbonate so just how do they justify such high costs in the graph?
    Materials are only $60/kwhr.
    LG said they are $145/kwhr and Musk said his were well cheaper than that for finished cells.

    1. jerryd says:

      BTW Tesla already secured their supplies at lower prices so another Tesla price advantage.
      Musk warned them to ramp up 18months ago but they didn’t listen.
      Now if anyone wants cells they have to order them 2 yrs in advance as all new production, mines and refineries have to be built from scratch.

  4. Speculawyer says:

    Yeah, I worry about the prices of other elements in the batteries, not Lithium.

  5. Brave Lil Toaster says:

    Psst, media. Guess what? Lithium-ion batteries aren’t made *of* lithium, they’re made *with* it.

    You’re welcome.

  6. marco loglio says:

    price of 400 USD for 1 kw/h for high power cells is a ridicolous calculation. I wonder who is going to pay for these completely unattending research.. Why this researches are publised in your web site ? Why nobody publish articles in which the real price of the lithium power cells is correctly around 120 USD for 1 Kw/h?

  7. Pushmi-Pullyu says:

    Amazing how so often some person, or team, or company, regurgitates well known facts and calls that a “new study”.

    The influence of the price of lithium on li-ion batteries has been greatly exaggerated by those promoting mineral exploration companies and/or metals futures. In reality, li-ion batteries don’t use that much lithium.

    For example,the ~53 kWh, ~950 pound Tesla Roadster battery pack used only about 9 pounds of lithium.

    The price of lithium has risen significantly since volume production of li-ion batteries started, due to increased demand. But prices of batteries continue to drop every year because most of the cost is in materials processing and other manufacturing costs, not in the actual raw materials cost, other than the cost of cobalt… which, unlike lithium, is a significant fraction of the cost of li-ion batteries.