In a move that clearly signals Toyota’s future intentions, the auto manufacturer, acting through an intermediary, has secured a deal with Argentinian lithium mining company, Orocobre, to supply a large amount of the lithium required for advanced electric car and plug-in hybrid batteries. The deal was shuttled through one of Toyota’s sister companies and main suppliers, Toyota Tsusho Corp, which is 22% owned by Toyota.
Toyota’s hybrids currently use nickel metal hydride (NiMH) batteries, but those batteries, although less expensive, don’t pack enough punch when used in fully electric and plug-in hybrid vehicles. As the company switches over to plug-in versions of its popular hybrids in the coming years it will need to also switch over to advanced Lithium Ion batteries.
Although there is plenty of Lithium available in the world to produce all the EV batteries required for a long time to come, competition for the raw material is expected to be fierce as automakers and suppliers start to ramp up production to meet demand. Locking in supply now shows a clear long-term plan on Toyota’s part.
The deal calls for Toyota Tsusho to initially invest $4.5 million in Orocobre to fund feasibility studies and pre-development activities in the Salar de Olaroz Lithium-Potash mine. Upon completion of those items, Toyota Tsusho will become a 25% owner in the project. The deal also makes the Argentinian project eligible for low cost Japanese government development loans.
“The size and quality of the deposit is world–class and we believe will produce high purity, battery grade materials required for the global battery industry, at a cost that is competitive with existing lithium brine producers in South America,” Toyota Tsusho said in a statement.
Source: Reuters
Image Credit: ar.obrien’s Flickr photostream. Used under a Creative Commons License.
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