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Increased use of electric vehicles and electronic devices such as iPhones is driving lithium-ion battery demand and may push lithium consumption to double or triple in the next eight years.
The lithium battery market, now valued at $11 billion per year, is expected to reach $43 billion by 2020 as strong demand for electric vehicles (EVs) and mobile electronics continues to grow, Dahlman Rose & Company analysts say.
Global consumption of lithium is forecast to double to 300,000 tons per year by 2020, and may triple if demand for EVs explodes in the next 10 years. General Motors (NYSE:GM) recently announced that in as little as two to four years, California-based Envia Systems could produce a lithium-ion battery that can power an electric car for 100 to 200 miles on a single charge.
According to a report by McKinsey & Company analysts, such improvements in lithium-ion battery design will lead to huge discounts in the cost of battery packs, making EVs more affordable and further increasing demand for lithium.
For now, it is surging demand for mobile electronics such as smartphones and tablets that is powering the current drive in lithium prices. “One can claim that without lithium, the whole mobile technology would not have been possible,” Seifi Ghasemi, Rockwood Holdings’ CEO said at a Deutsche Bank conference in June. “You use the product every single day.”
Global shipments of tablets will reach 107.4 million units in 2012 and 142.8 million in 2013, according to market researcher International Data (IDC). By 2016, worldwide tablet shipments are expected to hit 222.1 million. IDC also reported that global smartphone sales for the first quarter of 2012 have already hit 144.9 million units, with 686 million units in total sales expected for the whole year. The research firm expects that number to rise to 982 million in 2015.
Apple’s (NASDAQ:AAPL) iPhone 5, which is rumored to be scheduled for an early fall release, and a scaled-down iPad are both expected to place pressure on already strained global lithium supplies.
Current lithium-ion battery technology poses challenges
In a Forbes guest column last month, Noam Kedem, vice president of marketing for battery manufacturer Leyden Energy, speculates that the new iPhone’s anticipated upgraded features, such as a larger display, 4G LTE wireless connectivity and a more powerful processor, will require more power and generate more heat, posing challenges for the current lithium-ion battery technology.
Kedem predicts that like the battery found in the latest edition of Apple’s iPad — which is “some 70 percent bigger and heavier … yet still offers somewhat shorter battery life” — the iPhone 5’s battery will need to be larger to handle the demands of upgraded features.
Breakthrough in more flexible lithium-ion battery technology
Looking back over the past few decades, technological advancements have taken the evolution of portable electronics — from cell phones to notebooks to music players — from unwieldy to slim and streamlined. In the future, technology companies like Samsung (KRX:005930) and Sony (TSE:6758) are hoping to roll out electronics capable of folding or rolling up, including smartphones, tablets and e-readers. But if the predictions for the latest iPhone are any indication, the current lithium-ion battery technology may pose a huge problem.
Researchers at the Korea Advanced Institute of Science and Technology (KAIST) may have the answer.
On August 6, a research team led by Professor Keon Jae Lee announced that it has developed a solid-state, thin-film lithium-ion battery that can continuously deliver a charge even when flexed or folded. KAIST claims the new technology has the highest energy density ever achieved for a flexible battery and may be available for commercial use as early as 2013.
“There is no performance difference in energy density, capacity, and cycle life between our flexible battery and bulk batteries,” said Lee to Gizmag reporter Dario Borghino. “On the contrary, performance is improved by about 10 percent because of the stress release effect.”
The high-performance, rechargeable lithium-ion battery is “printed” on a thin layer of film, making it a perfect alternative to the conventional lithium-ion batteries used in smartphones and tablets while helping paper-thin, flexible and more resilient (and even wearable!) electronic devices become reality.
“The advent of a high performance flexible thin film battery will accelerate the development of next-generation fully flexible electronic systems in combination with existing flexible components such as display, memory, and LED,” Lee said in a press release about the breakthrough technology. Lee and his research team are currently investigating a laser lift-off technology to facilitate the mass production of flexible lithium-ion batteries and 3D stacking structures to enhance the charge density of the batteries.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.