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The Auto Industry – Why Lithium?
Lithium is the most precious element in transportation. Up to 70% of the cost of a lithium-ion battery goes to the raw materials, such as lithium. And the batteries are expensive! Did you know the new lithium-ion battery in GM‘s new 2010 Volt Hybrid costs $41,000? That’s a lot of $$$ for lithium investors!
TheNational Alliance for Advanced Transportation Battery Cell Manufacture reports that “Lithium-ion batteries are anticipated to replace gasoline as the primarysource of energy in future cars and military vehicles.”
Because lithium is the lightest metal on earth, it enables batteries to get smaller and at the same time, more powerful. This is why even our own government is trying to push for the rapid advance of Lithium batteries for use in transportation.
In addition, clean energy, energy independence, our quest to break free from Middle East oil, high gas prices; all of these things are raising the demand for lithium.
President Obama has made a promise to have 1 million American-madehybrid vehicles on the road by 2015. Most importantly, he’s backing it with money. The Advanced Technology Vehicle Manufacturing program for battery development has been awarded $25 Billion, and this massive funding has ignited lithium projects left and right.
The industry currently can’t produce enough lithium to build the hundreds of millions of large-format batteries needed to power electric cars, andplug-in hybrids of the future. This is why the demand for lithium continually increases and why massive amounts of capital funding are starting to pour into lithium mineral companies.
President Obama even has a stake in lithium and it can be found in his desire to seeGeneral Motors reemerge as an American industrial powerhouse. The administration wants GM come back to prominence and the only way to do that is with new technology (hybrid and electric cars) powered by lithium batteries.
GM’s very existence will depend on massive amounts of lithium. (HIT)" ticker="NYSE%3AHIT">Hitachi is currently supplying lithium-ion batteries for GM’s hybrid vehicles, and is planning to sharply raise production to meet surging demand for an onslaught of new gas-electric cars. It’s been projected that lithium production will need to increase 5-fold to meet the production demand for hybrid and electric cars by 2012!
GM?s introduction of theChevy Volt is just the start. General Motors, (F)" ticker="NYSE%3AF">Ford, (TM)" ticker="NYSE%3ATM">Toyota, Dodge, Chrysler, (MTU)" ticker="NYSE%3AMTU">Mitsubishi, (NSANY)" ticker="NASDAQ%3ANSANY">Nissan, Tesla, Saturn and Mercedes-Benz have all announced plans to build Li-ion battery-powered cars. Demand for lithium-powered vehicles is expected to increase 5-fold by 2012, and 20% year over year in the next decade!
All the major automakers are looking to acquire lithium companies to help ramp up production in order to get their hybrid and electric cars to the market as quickly as possible.
The U.S. government is even providing massive incentives to U.S. automakers (tied to the massive bailout of the auto industry) to start ramping up production of hybrid and electric cars.
Because of this U.S. automakers are looking heavily into acquiring lithium companies. What company would be a better target for acquisition than the only U.S. based Lithium Company, currently sitting on the second-largest lithium deposit in the world?