Is the Developing World Ready for Electric Car Boom?
If you had to separate the speakers at this year's Lithium Supply and Markets conference into two camps, you could do it like this: There are those who believe that the electrification of the automobile will proceed at a steady, orderly pace, and that over the next 10 or 15 years the world's lithium producers together to mine and process an additional 7 or so percent each year. Then there are those who believe anything could happen--who think this kind of orderly extrapolation is blindly conservative. And generally, these optimists--who believe that there's no telling how quickly electrically-powered vehicles of all kinds will spread, but that it'll probably be far more dramatic than most forecasters expect--happen to do business in either China or India.
Yesterday, for example, Iggy Tan, managing director of the Australian lithium producer Galaxy Resources, excoriated the analyst from TRU who earlier in the day had predicted that lithium suppliers were on track to produce dramatically more lithium over the next several years than the electric-car-battery industry would require. As a result, many of these suppliers would go bankrupt. Tan called the presentation "spreadsheet bull," a piece of grossly misguided fearmongering that completely failed to take into account the world's two great wild cards: China and India.
Tan, whose company is set to build an electric-bike-battery factory in China, made much the same argument at last year's conference. Today in China, millions of people get around on electric bikes. Tan expects those bikes to quickly switch from lead-acid to lithium-ion batteries, mostly because of government-mandated weight restrictions. Nearly 30 million e-bikes are sold in China every year. This, Tan argues, is the kind of enormous new market that most analyses of the future of the electric vehicle fail to take into account. And it's an important variable: Arguably the biggest problem with electric vehicles today is that the high cost of the batteries makes them inordinately expensive. What would make the batteries cheaper? Building them on a much larger scale. E-bikes obviously require a much smaller and less sophisticated battery than, say, the Chevy Volt, but they require something much more like an electric-car battery than does a laptop, and a proliferation of the lithium-ion powered e-bike could do very good things for the electric-vehicle market as a whole.
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