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Lithium Economics
Why
Toyota and Honda Dislike Lithium?
Mar 29, 2009
Over the last two
years or so, Toyota and Honda have been following a similar approach to a
lithium-based transition to electric propulsion in the car industry. Indeed
they have been rather conservative and cautious. In January 2009 Toyota
announced, for example, that its new Prius will still use nickel-metal hydride
batteries while not discarding the possibility to do some testing with
lithium-ion batteries for small fleets. Honda has been even tougher. In its
recently launched Insight model, it has simply ignored the latest breakthroughs
in lithium-ion battery technology essentially sticking to the same chemistry
used by Toyota. As of today, the two Japanese car companies are engaged in a
price war which has prompted Toyota to announce the launching of a hybrid
version of its small car Yaris to counterstrike the apparently recent market
success of Honda's Insight. But why are they both staying in the lower-end of
technology evolution regarding electric propulsion? In other words, why are
they still betting on conventional hybrid technology while the rest of
carmakers all over the world are aiming at Range Extended Electric Vehicles
(REEVs) and Battery Electric Vehicles (BEVs)?
Often times during
2007 and 2008 Toyota's CEOs have argued that lithium-ion is not yet a proven
technology for electric cars and that there are problems with lithium
availability on earth to ensure an actual replacement of petroleum-based
vehicles. These arguments have been seriously weakened by both recent
breakthroughs particularly in lithium Ferrum Phosphate battery technology that
is already powering two mass-produced REEVs in China and announcements by the
world's major lithium suppliers in Chile during the January 2009 Lithium Supply
& Markets Conference that there is indeed sufficient lithium on earth to
warrant the electric car revolution. Surprisingly, as a recent
news article from
the United Kingdom indicates, in 2009, Toyota appears to start moving ahead
with lithium technology, but again one needs to wonder whether this is a real
change in its business strategy.
At first sight,
Honda's approach has been more consistent than Toyota's in terms of what comes
first and what comes thereafter. To Honda, electric cars only make sense if
they are powered by hydrogen. That is why it has ruled out any possibility
whatsoever to launch lithium-powered plug-in hybrid or pure electric cars in
the near future. Nevertheless, earlier this year it has announced a joint
venture with
Yuasa to produce lithium-ion batteries. One simply wonders why Honda is
investing heavily in lithium while at the same time is questioning this type of
technology. Are there any specific reasons for such behavior?
In this context, I can
only conjecture that both Toyota and Honda may be playing the same game, one
aimed at precluding General Motors from succeeding in its attempt to lead the
electric car revolution. I am convinced that the launch of the “Volt” car by GM
is one (if not the most) important condition for the inauguration of electric
propulsion in the world. If this does not occur or it is somewhat delayed, then
Toyota and Honda have much to gain because that will necessarily postpone the arrival of the sixth techno-economic
paradigm with
lithium as its main factor and will help them make more profits out of a rather
obsolete but still commercially viable battery technology until the new emerging
battery technology is finally introduced into the market. This is most relevant
now following today's New
York Times news
that the chairman and executive chief of General Motors, Rick Wagoner, is
resigning, right in the middle of a serious turmoil at this firm. So when it
comes to lithium-ion battery technology, Toyota and Honda may in fact need to
be conservative and cautious at least for the time being; it may be in their
own interest to behave this way.
Times Article Viewed: 5725
Note.- This is a republication of a blog originally published on March 29, 2009, on EVWorld.com.
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