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Lithium ETF Plays Growth of Electric Cars and Mobile Electronics

By John Addison (10/26/10)

You may be reading this article thanks to the lithium battery in your notebook computer, smartphone, or other mobile device. Demand for lithium is forecasted to double in this decade thanks to a wide range of applications for this metal that is half the weight of water: materials, glass, pharmaceuticals, mobile electronics, power tools, hybrid cars, and electric cars.

Currently, electric cars cost more to purchase than many gasoline-powered cars, but less to fuel. Electric charging is equivalent to fueling with gasoline at 75 cents per gallon in many situations. Nighttime charge rates are even lower.

In 2012, Ford (F) will deliver about 100,000 lithium battery packs in its electric vehicles, newplug-in hybrid, and in all hybrids. Nissan (NSANY) will bring on-line a new battery plant in Tennessee that can make 200,000 lithium battery packs annually for its LEAF and hybrids. These volumes, improved battery chemistry, and streamlined supply chains will drive down the cost of lithium batteries. Automotive lithium battery packs currently cost about $700 per kilowatt-hour. By the end of the decade, automakers are optimistic that they will lower the cost to $250/kWh, at which point electric cars will be less expensive to buy than most gasoline cars.

What do the financial markets make of lithium? To find out, I interviewed Bruno del Ama, CEO of Global X Funds. His exchange-traded fund, Global X Lithium ETF (NYSE: LIT), was launched on July 23, 2010, at 16. It has already soared to 20. For some investors, lithium is the new gold. 10 of the fund holdings are in lithium mining and processing companies; 10 in lithium battery makers.

The fund is dominated with large mining firms such as Sociedad Quimica y Minera de Chile (SQM), FMC Corporation (FMC), and Rockwood Holdings (ROC). The fund is not a dream for environmentally and socially conscience investors. These companies mine a range of metals, using energy intensive processes, chemicals, and put miners in harm’s way.

The fund’s largest lithium battery company holdings include Saft, Ener1, ABT, GS Yuasa, and A123. Saft in a joint venture (JV) with Johnson Controls supplies Ford for the Transit Connect Electric and Mercedes hybrids. GS Yuasa supplies the current Japanese EV leader, Mitsubishi; GS Yuasa is well positioned to be Honda’s supplier for new electric and plug-in hybrids. Ener1 is betting on the Think. A123 is supplying Fisker and non-automotive applications.

The fund does not include the battery companies most successful in lithium: NEC, Panasonic, Samsung, and LG Chem. These diversified giants are excluded because their lithium battery business is less than the 15 percent minimum to be included in LIT. NEC is in the AESC joint venture with Nissan. Panasonic supplies Toyota and Tesla. Samsung is in a JV with Bosch to supply makers such as BMW. LG Chem’s Compact Power is supplying lithium batteries for the Chevrolet Volt and the Ford Electric.

Scientific American reports a 500-year supply of lithium, compared with only decades of available cooper. Demand for lithium will increase as we expand from devices that only need one battery cell, to notebook PCs needing the equivalent of 8, to hybrid cars that use the equivalent of 125, to the Nissan LEAF, which uses the equivalent of 3,000.Reuters Lithium Facts

It would take 60 million cars to use the current annual production of lithium. Although there is plenty of lithium, prices will increase to keep up with the growing demand. Since a typical electric car battery pack only uses 4 pounds of lithium, the price will have little impact on the total battery cost.

There is no guarantee that today’s lithium ion batteries will be the leaders in future decades. Labs to start-ups are working on lithium air, zinc air, fuel cells, ultracapacitors, and hybrid energy storage. It is challenging to overcome lithium ion’s cost and scale advantages. More energy can be stored in an ounce of this metal than any practical metal alternative.

By 2020, the California Energy Commission forecasts 1.5 million plug-in cars on California roads. Clean Fleet Report forecasts 10 million for the USA. Cars, mobile electronics, and many applications will fuel the demand for the lightest of metals and create growth opportunities for the leading battery suppliers.

By John Addison. Publisher of the Clean Fleet Report and conference speaker. Disclosure: author owns shares of LIT.

Toyota Prius PHV Fights Chevy Volt

By John Addison (from original post in the Clean Fleet Report 7/6/10)

As the world leader in hybrid cars, Toyota is fighting to extend that leadership in both plug-in hybrids and battery electric cars. In plug-in hybrids, GM plans on first mover advantage with the Chevy Volt. In electric cars, the Nissan LEAF has a sizable lead over the . But Toyota has more cars on the road with electric motors, advanced batteries, and electric drive systems than all competitors put together. Toyota does not like second place.

In talking today with Toyota’s Cindy Knight, she assures me that Toyota is on track on all fronts. A number of U.S. fleets are already driving the new 2010 Toyota Prius PHV including the following:

San Diego Gas and Electric
Zipcar Washington DC
Ports of New York and New Jersey
Silicon Valley Leadership Group
Portland State University
Qualcomm
Southern California Air Quality Management District

By year-end, 600 Prius PHV will be on the road including 150 in the United States. A number will be in 18 month lease programs. In one prefecture in Japan, the Prius PHV can be rented by the hour. Ten of the Prius PHV will be part of Xcel Energy’s SmartGridCity program in Boulder, CO. Boulder residents will participate in an interdisciplinary research project coordinated by the University of Colorado at Boulder Renewable and Sustainable Energy Institute (RASEI), a new joint venture between the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) and the University of Colorado at Boulder.

During the test of 600 plug-in hybrids, Toyota will be receiving extensive wireless data from each vehicle, giving a near realtime profile of electric range, frequency and speed of charge, mileage, use, and reliability of the cars. Aggregated data will be posted on Toyota’s EQS Website

By 2012, Toyota will offer customers with a wide-range of vehicles with fuel efficient drive systems. The Prius will be the best seller, but the 2012 Toyota Prius PHV will be in demand from those who want to be greener with a 14 mile electric range. A compact hybrid will help the more price conscious buyers. The Toyota Camry Hybrid will continue to be offered. Lexus hybrids will continue to deliver at least 35 mpg along with their host of luxury appointments.
Ford will also offer customers a wide-range of fuel efficient and electric cars, starting with a Ford Focus that customers can buy as with ecoboost fuel economy, or as a hybrid, or as a plug-in hybrid, or as a pure battery electric. Ford will expand this range of offerings to other lines in the years past 2012.

Toyota’s Transition to Lithium Batteries

The 2010 Prius PHV has three lithium-ion battery packs, one main and two additional packs (pack one and pack two) with a combined weight of 330 pounds. In contrast, the Prius NiMH battery pack weighs 110 pounds. Each battery pack contains 96 individual 3.6 V cells wired in series with a nominal voltage of 345.6 V DC.

When the PHV is fully charged the two additional battery packs supply power to the electric motor. Pack one and pack two operate in tandem with main battery pack but only one at a time on the individual circuit. When pack one’s battery’s charge is depleted, it will disconnect from the circuit and pack two will engage and supply electrical energy to the drive line. When pack two has depleted it will disconnect from the circuit and the vehicle will operate like a regular hybrid. Pack one and pack two will not reengage in tandem with the main battery pack until the vehicle is plugged in and charged.

The Prius PHV’s larger HV battery assembly requires additional cooling. The vehicle is equipped with three battery-cooling blowers, one for each of the three battery packs. Each battery pack also has an exclusive intake air duct. One cooling blower cools the DC/DC converter.

Like all Toyota hybrids, the lithium-ion batteries are built to last for the life of the vehicle. Toyota is using lithium not NiMH batteries in its Auris hybrid. Mercedes, Nissan, Ford and others have announced hybrid plans using lithium. Will 2012 be the year that Toyota offers a hybrid Prius with lithium batteries? Toyota is not yet ready to say.

Toyota has a number of advanced battery R&D programs with nickel-metal, lithium-ion and “beyond lithium” for a wide variety of applications in conventional hybrids, PHVs, BEVs and FCHVs. Toyota uses Panasonic and Sanyo battery cells. When Panasonic acquired Sanyo, Toyota increased its ownership to over 80 percent in the Panasonic EV Energy Company which makes prismatic module nickel metal hydride and lithium-ion battery packs. Toyota also owns about 2 percent of Tesla, a major Panasonic partner.

an Urban Electric Car

In 2012, city drivers will have fun with the , a pure battery-electric car. Currently Smart car drivers are saving $20 per day squeezing into parking spaces too big for other cars. By 2012 Smart will have competition from the which is over 4.5 feet shorter than the Prius. For the microcompact space, Smart is introducing an electric version, as is Mitsubishi with the iMiEV. All these cars can squeeze in four people with skinny waists.

Toyota’s FT-EV is an electric vehicle with a 50-mile range and a maximum speed of 70 mpg. The lithium battery pack can be charged in 2.5 hours with a 220/240 volt charge and in less time if not fully discharged.

By John Addison. Publisher of the Clean Fleet Report and conference speaker.

Tesla’s Strategic Relationships with Toyota and Daimler

By John Addison (5/27/10)

Toyota agreed to purchase $50 million of Tesla’s common stock subsequent to the closing of Tesla’s currently planned initial public offering, giving Toyota over 2 percent of Tesla. The investment was negotiated with Tesla’s purchase of the former NUMMI factory in Fremont, California, that once employed over 4,000 workers in a Toyota-General Motors JV plant. Tesla and Toyota intend to cooperate on the development of electric vehicles, parts, and production system and engineering support. Neal Dikeman reported on Friday the significance of this for Tesla, Toyota, and California jobs.

In 2012, new Tesla S sedan will roll-out of the plant with electric range that remarkably matches the range of many gasoline cars. Tesla is developing a roomy Model S hatchback that starts at $57,400, about half the price of the Roadster. Tesla will start delivering the Model S in 2012 from its new factory in California. The Model S will have up to a 300 mile range, far beyond the Nissan Leaf 100 mile range the Chevy Volt 40-mile electric range, and current ambitions of other electric car makers. Top 10 Electric Car Makers

Tesla will compete with other sedan makers by also offering more passenger space, more cargo space, and a premium cache. With seating for five adults and two children, plus an additional trunk under the hood, Model S has passenger carrying capacity and versatility rivaling SUVs and minivans. Rear seats fold flat, and the hatch gives way to a roomy opening.

With a range up to 300 miles and 45-minute QuickCharge, the Model S can carry five adults and two children in quiet comfort. The roomy electric car starts at a base price of $57,400, before the $7,500 federal EV tax credit and additional tax credits in many states. Yes, it will be more expensive than sedans from Nissan, Ford, and GM but with more battery storage for more range with 3 battery pack options offer a range of 160, 230 or 300 miles per charge.
Don’t pull-up to the Model S in your sedan and try to race. The Model S goes from 0-60 mph in 5.6 seconds with 120 mph top speed, and the promise of sporty handling in the chassis and suspension.

Panasonic Lithium Batteries and Tesla Packs

Tesla touts its expertise and intellectual property in a proprietary electric powertrain that incorporates four key components—an advanced battery pack, power electronics module, high-efficiency motor and extensive control software.

Tesla delivers more range per charge than other electric vehicles by including more lithium batteries. Tesla’s relationship with battery supplier Panasonic is critical. The Roadster uses 6,800 Panasonic lithium-nickel consumer-sized batteries integrated into a Tesla designed battery-pack with unique energy management and thermal management. The new Tesla Model S will use up to 5,500 Panasonic batteries.

Tesla has been skillful in developing strategic partnerships. Tesla also has a relationship with Daimler to supply technology, battery packs and chargers for Daimler’s Smart fortwo electric drive. Daimler holds more than 5% of Tesla’s capital stock. Daimler has orders for Tesla to supply it with up to 1,500 battery packs and chargers to support a trial of the Smart fortwo electric drive in at least five European cities. Tesla delivered the first of these battery packs and chargers in November 2009. Daimler also engaged Tesla to assist with the development and production of a battery pack and charger for a pilot fleet of its A-Class electric vehicles to be introduced in Europe during 2011. Tesla has ambitions to supply other vehicle makers.

By John Addison, Publisher of the Clean Fleet Report and conference speaker.

Top Electric Car Makers for the United States Market

By John Addison (original post at Clean Fleet Report)

By 2011 year end, competition will be intense for electric car leadership. The Clean Fleet Report Top 10 Electric Car Makers describes our best guess about the market share leaders for delivered plug-in vehicles on the United States roads in 2011, although not necessarily in order of 2011 installed market share.

Tesla is the first to sell 1,000 electric cars for the U.S. highways. Like its Roadster, the company is going zero to sixty in less than four seconds. In August the company reported its first profits. With $465 million in DOE loans, the company is developing a roomy Model S hatchback that starts at $57,400, about half the price of the Roadster. The Roadster is battery-electric with a 240 mile range; the Model S may have a remarkable electric range of 300 miles per charge.

Nissan (NSANY) will be the first auto maker to put over 10,000 electric cars on U.S. highways. Major cities have already committed to over 10,000 Nissan Leaf and over 10,000 charge stations. Nissan will start taking dealer orders from individuals in the spring of 2010. Nissan plans to make the 5-seat hatchback affordable, but sale and/or lease options have not been finalized. The Nissan Leaf is battery-electric with a 100 mile range per charge.

Toyota (TM) Prius Plug-in Hybrid (PHV) will build on the million car success of Toyota hybrids. At first glance, the PHV looks like another Prius until you spot the J1772 plug for smart charging. Five hundred PHV are now being put into fleet trails from cities to car sharing services. In 2011, U.S. dealer orders should begin. Toyota will initially control costs by only using a 5kWh battery for a 14 mile electric range. In 2012, Toyota will expand its offerings to include a pure battery-electric FT-EV.

General Motors wants to be the plug-in leader with the Chevy Volt, a plug-in hybrid with 40 miles of electric range and up to 500 miles by engaging a small gasoline engine to act as a generator. Bob Lutz says than Chevy hopes to build at least 8,000 in 2011. GM has a complete E-Flex roadmap which envisions added offerings. Converj may become the Cadillac of extend-range electrics. In the future, Opel may offer a diesel plug-in hybrid in Europe. Look for a range versus cost battle with Toyota, as the Volt achieves more electric range by adding to vehicle cost with a 16kWh battery.

Accenture (ACN) forecasts 1.5 million electric vehicles in the United States by 2015. Over 10 million electric vehicles are easily possible by 2020.


Read the complete Clean Fleet Report Top 10 Electric Car Makers John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.

Clean Energy and Climate Protection Bill Accelerates Electric Vehicles and Renewable Energy

For the first time, the U.S. House of Representatives passed legislation regulating greenhouse gases. Due to intense lobbying by industries that would incur added cost, such as coal powered utilities, HR 2454 barely was approved by a vote of 219 to 212. New battles are ahead in the Senate for the Waxman-Markey Bill.

HR 2454 encourages more electric vehicles, plug-in hybrids, and advanced batteries to be developed and commercialized in the United States. Should HR 2454 become law, cities will more rapidly roll-out convenient electric charging stations. If you want to buy a car with better mileage you will even get more cash for your clunker – $3,500 to $4,500 until March 31, 2010.

The bill is also a win for United States energy security. HR 2454 explicitly states, “The status of oil as a strategic commodity, which derives from its domination of the transportation sector, presents a clear and present danger to the United States…Fuel competition and consumer choice would similarly serve to end oil’s monopoly in the transportation sector.”

The bill has something for everyone. Cleantech innovators get the free luxury health spa; while fossil fuel curmudgeons, a free colonoscopy.

The Waxman-Market Bill puts a limit (“cap”) on greenhouse gas emissions. Overtime industry must pay for permits to pollution. Innovation will be rewarded because clean organizations can sell their carbon credits to help polluters meet their limits.

The market place will work with cap-and-trade. Some of the pollution permit fees will be reinvested in our future. Clean innovators will flourish and create more green jobs. To help automakers retool plants for these advanced vehicles and/or drive system components, the $25 billion of funding in the Energy Independence and Security Act of 2007 will double in HR 2454 to $50 billion.

Automakers are more likely to succeed with their electric vehicle and plug-in plans for 2010 through 2012. For example, Ford (F) will start selling electric cars, vans, and a plug-in Escape. GM will start selling the plug-in Volt and now has 80 to demonstrate; Toyota (TM) will start selling its plug-in Prius and is putting 500 into fleet demonstration; Chrysler with Fiat as a key partner will sell everything from plug-in Jeeps to minivans; Nissan is partnering with electric utilities to sell more electric vehicles than the rest of the automakers put together.

Electric utilities are asked in HR 2454 to develop infrastructure plans that can optionally include fast charging, a nice win for companies such as AeroVironment (AVAV) and Better Place. Smart charging and smart grid infrastructure plans are requested from state regulators. An intelligent network will develop so that you can plug-in anywhere, be able to remotely view your state of charge and check your billing – a nice win for firms such as Coulomb Technologies. If the bill becomes law, look for utility-local government-NGO consortiums to apply for funding to implement smart-grid solutions that include smart charging stations.

Financial incentives are envisioned for commercial and federal fleets, car sharing firms, and others who can accelerate the deployment of these electric zero-emission and ultra low emission vehicles.

From cars to electric-rail in public transportation, we are beginning to shift from running on engines that burn petroleum fuels to running on efficient electric motors. Thanks to HR 2454, that electricity will be increasingly renewable. Wind, solar, geothermal, small hydro, renewable biomass, and other renewable energy produced in the United States will all be encouraged by the incentives inherent in carbon cap-and-trade.

The Waxman-Markey Bill, of course, is about much more than electric vehicles and renewable energy. It provides a major step towards greater energy security, energy efficiency, and climate solutions of which clean transportation is a component.

The close vote shows that the bill has opponents. Many question whether we even have an environmental problem. As Dan Quayle once observed, “”It isn’t pollution that’s harming the environment. It’s the impurities in our air and water that are doing it.” Others are opposed to putting a cap on emissions. As George W. Bush put it, “What I am against is quotas. I am against hard quotas, quotas they basically delineate based upon whatever. However they delineate, quotas, I think, vulcanize society. So I don’t know how that fits into what everybody else is saying, their relative positions, but that’s my position.”

Environmental groups offered a mixed reaction due to the many compromises and addendums that were necessary to secure a majority vote. The Environmental Defense Fund President Fred Krupp stated, “”The bill that emerged from the House has the fundamental structure we need to significantly reduce carbon pollution while growing the economy. It puts a strong cap on emissions and reorients our energy market to make low-carbon power the goal. It ensures that utility rates will stay affordable and a competitive playing field for U.S. companies.”

Greenpeace opposes the compromised bill, “President Obama vowed to ‘restore science to its rightful place’ in his inaugural address….The Waxman-Markey climate legislation, however, will not do what the science says is necessary to avert the worst effects of climate change. In fact, House Democrats have worked extensively with the coal industry to edit the bill, which has translated into weakened emissions targets.”

Other groups supported the bill in the hopes that it would be strengthened. Frances Beinecke, President of the Natural Resources Defense Council stated, “But the work is far from over. Now, the bill will move to the Senate where it needs to be strengthened, so we can reach the full potential of our clean energy future and avoid the worst impacts of climate change. We can achieve this by strengthening the targets for carbon pollution.”

What all nations put in the sky and the oceans affects all of us and all of our children. Given the United States long history of being the world’s biggest emitter of greenhouse gases, nations have hoped that we would reduce emissions 40 percent by 2020. They will be lucky to see 17 percent. The new bill puts us in a weak position as we pursue a global climate solution treaty that involves all nations, but it takes us out of the category of obstruction as Copenhagen meetings continue.

Yet, reality is that with all the competing interests in our nation of 300 million people, we will not go directly to the energy and climate solution that is needed. We cannot kill the good in search of the perfect. As Jane Goodall observed, “Lasting change is a series of compromises. And compromise is all right, as long your values don’t change.”

When we get past all industry scare tactics, we may end up spending an extra $20 per month for cleaner electricity until we finally replace those old light bulbs. We may also save $200 per month by running cleaner cars and save another $200 per month avoiding doctor and hospital bills to deal with damaged lungs. Clean Energy and Climate Protection are not expenses, they are investment in our future – a future that includes our riding on sunlight.

<!– By John Addison, Jun 29th, 2009. Learn about the future of cars and transportation in John’s new book – Save Gas, Save the Planet.–> By John Addison. John Addison publishes the Clean Fleet Report and speaks at conferences. He is the author of the new book – Save Gas, Save the Planet – now selling at Amazon and other booksellers.