Obama's Cause and Lithium's Effect

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"The start flag has dropped and the race to build lithium-ion batteries for vehicles has started."

President Obama is a convert. Impatient with the progress of hydrogen fuel cells, which always seem to be "about 20 years way," he ripped up the previous administration's financial commitment to hydrogen development to instead focus on the electric vehicles (EVs). This, he has maintained, is the quicker technological route to lowering emissions.

He is not alone. During last year's American presidential campaign, McCain laid out his plans to jumpstart the EV industry with a US$300 million reward for whoever could build a better battery.

Washington has already handed out over US$9 billion in loans to Ford, Tesla and Nissan to promote cleaner vehicles. The latter is to build an automotive battery plant in Tennessee.

Mid-year, Ontario jumped in to pledge incentives of as much as $10,000 per car, to lure drivers into EVs.

What is happening here? And why are there vast sums of money sloshing around for EVs?

A vital ingredient in the next generation of car batteries is lithium batteries, which play a key role in the auto industry. They are by no means new. Lithium-ion batteries have been around for a while. It is only now that they are making headlines.

And even as the auto industry is gearing up to make its first real go at marketing plug-in vehicles for the masses, the road signs are clear. The start flag has dropped and the race to build lithium-ion batteries for vehicles has started.

Given that China has the largest lithium reserves in the world, the country could well have a stranglehold soon. China's lithium carbonate output is expected to amount to 45,000 tons and its designed production capacity will surpass 60,000 tons by 2010, when China will become a net exporter of lithium carbonate.

But the idea of relying on a foreign power for domestic consumption was just not easy to swallow.

Incidentally, in a report to Congress mid-2009, the U.S. Government Accountability Office warned that by switching from gas-powered cars to lithium battery cars, the U.S. could simply '"substitute reliance on one foreign resource for another."

President Obama's aim is to have one million electric cars on U.S. roads by 2015, but the road ahead is clearly still pothole ridden.

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