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Lithium Market Continues to Benefit from Mobile Electronics Demand

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


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