THE FUTURE OF THE NICKEL METAL HYDRIDE BATTERY AND THE RARE...

THE FUTURE OF THE NICKEL METAL HYDRIDE BATTERY AND THE RARE EARTH METALS IT IS CONSTRUCTED FROM
By Jack Lifton
23 Jan 2009 at 12:21 PM

The power train technology in the Toyota Prius is the benchmark for the twenty-first century’s agenda to find an alternative energy system for passenger carrying vehicles. The battery powered electric motor driven car, the external combustion engine (steam driven) car, and the internal combustion (diesel or gasoline engine fueled by liquid or gaseous hydrocarbons) driven car were all invented in the late eighteenth and nineteenth centuries, and the contest to determine which of these power trains would predominate to be mass produced in the twentieth century was won in stages by the internal combustion engine using primarily gasoline as a fuel. The widespread availability of gasoline and kerosene by 1910 and the lack of an extensive power grid inside or outside all but the most important cities (and then only in Western Europe or the eastern and Midwestern US) meant that you could not refuel (i.e., recharge) a battery driven car economically or easily other than in the biggest cities. Gasoline and kerosene could be transported from their production sites, by contrast, to wherever they were needed either by rail or by the new motor powered freight vehicles, known as delivery trucks, the range of which, since they could carry enormous quantities of fuel, was essentially limitless.



Today after a century of development and mass production the hydrocarbon fueled internal combustion engine powered motorcar is a mature technology. Fear of toxic emissions locally, climate changing emissions globally, and a peak in hydrocarbon-fuel-production capacity has rekindled interest in alternate power trains for passenger carrying motor vehicles. This interest has now focused on the electrification of vehicle power trains. Extensive research and development of storage batteries has been carried out since 1975, and this has resulted in much improved lead-acid batteries and the development of a number of new technologies capable of mass production including nickel cadmium batteries, lithium-ion batteries, and nickel metal hydride batteries all of which have been put into use in small power trains, such as for portable tools, in one form or another since 1975.



For automotive use, the key issues are capacity, safety, cost, efficiency, reliability, and longevity. All of the hype has focused on theoretical efficiency whereas in the real world the primary issue has been capacity and cost followed by safety, reliability and longevity, in that order. So far, the hands-down winner among the new battery technologies, as of 2009, is the nickel metal hydride battery based on the hydrogen absorption capacity of the rare earth metal lanthanum alloyed with nickel and cobalt.



The popular press, which due to the poor education of most of its practitioners, is the literal slave of the marketing and public relations departments of companies that stand to benefit financially from the public acceptance of one battery technology over another by means of a popularity contest in which the winner gets government subsidies to continue the development of his chosen technology, no matter what its actual or future value, has chosen to hyperventilate over the immature and untested lithium-ion battery technology alone. Ignorant or interest-conflicted spokesmen for any of the 26 lithium battery chemistries now being researched will say things such as “nickel-metal hydride battery technology is ‘primitive’ compared to the undisclosed lithium ion technology they are offering to sell whenever it is developed. This type of statement is simply stupid.



Nickel cadmium battery technology was found to be superior to that of lead acid for personal electronics and power tools, but environmentally driven restrictions on the handling and disposal of the toxic metal cadmium permanently limited scaling up such batteries to where they would have the capacity to power ordinary passenger carrying small vehicles. Research into substitutes for cadmium intersected at that point with research on the storage of hydrogen in the solid state for the purpose of creating a way to release the hydrogen in gaseous form in a controlled way for fuel use, and this led to the development of the nickel metal hydride battery, which has superior power density storage over that of lead-acid batteries, but was not capable of replacing lead acid batteries in their most fundamental use as SLI, Starting-Lighting-Ignition, power sources for internal combustion engines due to the inability of the original nickel metal hydride cells to withstand and recover from the deep discharge necessary to start an internal combustion engine.



Prodded by the 1972 “Oil Shock” which resulted from the nationalization of the foreign owned oil companies operating in the predominantly Arab Moslem states of the Middle East and the subsequent quintupling of the world oil price GM had done more than any other OEM automotive company in the 1970s and 80s to reinvent the battery powered electric car, but lead acid battery technology was a limiting factor; it only allowed a range of 90 miles on a charge with a top speed of 60 mph for a two passenger car. This was considered insufficient to compete with the ‘performance’ of a gasoline powered internal combustion engine driven car. The diversification of battery technologies that had occurred by the mid-1980s caused GM to innovate and begin developing a hybrid power train in which a small gasoline engine would take over from the battery when it reached a low level of charge or a performance maximum and recharge the battery while also propelling or assisting in propelling the car. GM also at that time looked into a hybrid all-electric combination using a battery and a super capacitor, but it was much too early in super capacitor development for a full-scale research and development program, so the project was shelved. The first hybrids were internal combustion –electric propulsion systems and were made with lead-acid batteries. Then the nickel cadmium and nickel-metal hydride batteries came on the scene and a hybrid was developed that carried one lead acid battery to start the IC engine when necessary and a ‘pack’ of nickel metal hydride batteries for battery propulsion purposes.



General Motors lost interest in vehicle electrification when California rescinded its mandate that 2% of all of the cars sold by any manufacturer offering cars for sale in California must have zero emissions. GM developed and was going to sell the battery-only powered EV1 in California to satisfy the legal requirement. The EV1 was first meant to use lead-acid batteries. GM was looking at nickel-metal hydride batteries when its lobbyists convinced the California agency overseeing the program to cancel the mandate. At that point, GM not only withdrew the EV1 from the market but cancelled the program and scrapped all of the EV1s as they were returned by their lessees. Toyota, which had been developing a hybrid power train in parallel with GM for the same reason - to satisfy the low emissions requirements in California - decided to manufacture and sell a hybrid power train it had also developed using the nickel-metal hydride battery and to continue to sell it for long enough to evaluate both the power train and the market. The result was the first Toyota Prius offered for sale in California in 1997.



No attempts were made in the twentieth century to substitute lithium-ion battery technology for either lead-acid or nickel metal hydride uses by any OEM automotive mass marketer. Toyota was committed to a thorough evaluation of the hybrid power train and the nickel-metal hydride battery as a system, and GM was disinterested in vehicle electrification completely. In any case, the available lithium-ion batteries, all then based on lithium-cobalt-oxide technology were too small for the purpose and there was no data on scaling them up. In addition, they were quirky; they had a tendency to overheat and their failure modes were unknown. Sony had introduced rechargeable lithium-ion batteries for its personal and portable electronics in 1992 as the successor to nickel cadmium, but there was very little interest at that point by the few OEM automotive assemblers looking at vehicle electrification in starting up another long term expensive research and development program, because even if lithium-ion batteries were theoretically four times as efficient as lead-acid and twice as efficient as nickel-metal hydride these were not perceived as major differences because they were differences of quantity not quality and losses from manufacturing problems always and rapidly downgrade real products from their theoretical maximums.



One major factor noted and acted upon only by Toyota early on in its program for evaluating nickel-metal hydride battery technology was completely overlooked by all of the other mass producers of vehicles who had any interest in the potential of the lithium-ion battery. This factor was the nature of the supply of the critical metal lanthanum, a rare earth metal, without which the nickel-metal hydride battery neither could function nor be built at all. Toyota was interested and had become knowledgeable because it had a long term plan to control the supply of the rare earth metals neodymium and praseodymium which were critical for the construction of the newly developed super permanent magnets that had made the miniaturization of powerful electric motors possible China, through predatory pricing, by 2000 controlled the global production of rare earth metals.



This meant that all of the lanthanum critically required to build a nickel-metal hydride battery also came from China. In fact in order to insure that it could get lanthanum the American, Detroit-area engineering firm, Energy Conversion Devices, Inc, which invented the nickel-metal hydride battery had agreed in the late 1980s to build a battery electrode manufacturing facility in China . ECD paid in part for access to the lanthanum it needed by giving the technology for building the batteries to a Chinese partner. Chinese companies have thus been constructing nickel-metal hydride batteries for nearly 20 years without interruption.



Toyota took a license from ECD in the 1990s and went into a strategic alliance with Matsushita (Panasonic) to develop and mass produce nickel-metal hydride batteries in Japan for its own use. ECD’s most profitable patent was a process patent, which gave ECD the right to royalties from anyone using nickel-metal hydride batteries for vehicle propulsion. This is commonly misunderstood and many writers claim that ECD has the ‘rights’ to any nickel-metal hydride battery developments by any of its licensees. This is simply not true and in the case of Toyota, for example, the Japanese car maker has now bought out Matsushita’s share of their joint venture and is constructing a new plant in Japan to make its own much improved version of the nickel-metal hydride battery for the Prius type power train in-house. Toyota plans to triple its production of Prius- power- train- using hybrid vehicles and of nickel-metal hydride batteries built entirely in-house to a total of 1,000,000 vehicles and 1,000,000 batteries per year by 2011. In order to insure that it has sufficient lanthanum for its needs Toyota has been aggressively and quietly stockpiling lanthanum and negotiating off-takes with those non-Chinese REE miners who are closest to startup. I believe that Toyota has off-take agreements with Australia’s Lynas (ASX: LYC)and with America’s Molycorp, which has been very recently (late 2008) bought and taken private by venture capital funds and says that it is in the process of restarting its REE mine at Mountain Pass, California, which until 1994 was the world’s largest single point producer of REEs. TTK, the holding company for all of the Toyoda family’s enterprises, including Toyota Motor Car Company, has purchased outright a Japanese trading company specializing in REEs and has agreed to invest in a REE mining development promoted in Viet Nam by the Vietnamese government. Toyota has also opened talks with the Canadian REE junior, Great Western Minerals Group (TSX: GWG), and with one junior REE venture in the Republic of South Africa.



The reason that I have gone into such detail is to show that Toyota’s business model includes a level of long term planning to insure the availability to it of critical raw materials that puts it head and shoulders above the short sighted incompetent and incomplete planning, if one can call it that, of Toyota’s competitors, such as GM, Ford, and Chrysler.



Toyota’s management has concluded that lithium battery technology is not mature enough now for a full-scale commitment by Toyota to move from nickel-metal hydride battery technology to lithium battery technology in the near future. Toyota has announced that it will construct a few lithium batteries for some short runs of commuter cars to begin testing the concepts, and the markets for short-range battery operated or extended range vehicles.



Honda and Ford seem also to be following the Toyota model.



The main reason that GM has suddenly discovered lithium batteries is that there is no other technology available to them!



At the beginning of the twenty-first century Rick Wagoner, by stupidly steering GM away from vehicle electrification after the pressure from Californication went away, surrendered GM’s lead in battery and hybrid power train development. In the middle of the first decade of the twenty-first century, Wagoner was jolted from his stupor by the outstanding success of the Prius, and he decreed that GM would leapfrog over Toyota to a fuel cell powered car. His subordinates fearing his wrath could not muster the courage to tell him that the journey of a thousand miles begins with a few short first steps, so after floundering for a while they told him that they needed first to build hybrids and then battery powered cars in order to develop the knowledge base to build fuel cell powered electric cars.



It was clear by 2005 even to GM that they would never be able to obtain enough REEs so late in the game to be able to build nickel-metal hydride batteries. GM had ignored the joint venture in nearby Troy, Michigan between Energy Conversion Devices, inc, and Chevron, called COBASYS, which was set up to build and supply nickel-metal hydride batteries primarily to GM and it had decayed through neglect and mismanagement to a failed company the products of which for GM for the 2007 model year were 100% recalled for catastrophic failure potential, after cracked cases caused the electrolyte to leak out from several of its batteries. COBASYS was by that time importing components from Sanyo in Japan and assembling them in Troy. This was amazing since COBASYS was literally the direct successor of the very company that invented the nickel-metal hydride battery and offered it to GM in the mid-1980s.



GM has leapfrogged from safe, reliable, low cost (compared to lithium), and durable, long-lived nickel metal hydride battery based hybrids to an immature technology, lithium-ion batteries for vehicle electrification of low cost mass-produced small passenger carrying vehicles, because it had to do so to remain in the game. Yet even now, Rick Wagoner has decreed that the Chevrolet Volt is only an intermediate step in the path to the fuel cell powered electric car.



GM is functionally bankrupt and has consistently made bad decisions during the last decade, in particular, Toyota has led the way to the electrification of small passenger carrying vehicles and leads the world in that category. Honda and Ford are following Toyota’s lead.



So, excuse me if I yawn when I hear about GM spending a lot of American taxpayer subsidies in Korea to buy batteries that are not proven to be durable, reliable, safe, economical, or long lived to build a car that will, when it finally comes out, have to compete with a half dozen others that will already be in the market. Excuse me also if I wonder why GM wasted years and hundreds of millions of dollars of other people’s money ignoring the opportunity to support a world class battery operation owned and operated by Americans with innovative skills in battery technology and located in Troy, Michigan less than 10 miles from GM’s so-called technical center.



I believe that there may well be one day an economical, safe, durable, reliable, long-lived lithium ion battery technology for vehicle power train direct electrification. I do not believe it will come from any efforts by General Motors.



The largest proportion of electrified passenger carrying small vehicles for the next decade will utilize a nickel-metal hydride battery as part of a hybrid power train. A much smaller proportion will be powered by lithium-ion batteries in all electric or extended range electric power trains. Fuel cells and other rechargeable battery technologies will be tried also during that period.



There will be a growing demand for rare earth metals for nickel-metal hydride batteries and for neodymium-iron-boron permanent magnets, which can only be met by extending the production of REEs outside of China. While there will be no shortage of lithium there will be a shortage of platinum group metals as the number of motor vehicles requiring them reaches 100 million a year before 2015 and then increases. Unless there is a breakthrough in fuel cell technology allowing it to be free of the need for platinum and/or palladium it will not be possible to build very many fuel cell powered vehicles ever, because while all of these technologies are being developed and tested the world will have reached a peak production level for the critical minor metals necessary for the mass production of technologies such as fuel cells. The same will occur for rare earth elements.



If, and only if, the lithium ion battery for full vehicle electrification becomes economically practical then and only then will vehicle electrification become universal. Until then the world’s fleet of cars and trucks will remain overwhelmingly powered by gasoline and kerosene. The distant second power train will be hybrids using nickel-metal hydride batteries, and a small fraction of future vehicles will be lithium-ion battery only short-range passenger carrying vehicles. This is the lesson of the logical development of technology.





Jack Lifton is a featured contributor to the new Resource Investor. With 35 years experience in the OEM electronics and automotive supply industries, he is a metals sourcing consultant for OEM heavy industry and offers due diligence analysis for institutional investors. Lifton is a prominent speaker on the market fundamentals of minor metals, and their end-uses, and travels the world on behalf of Fortune 500 and Global 1000 corporations. Reach him directly at [email protected].