Despite low gas prices and a renewed infatuation with SUVs, automakers are still betting on an eventual surge in the popularity of hybrid and electric cars. More and more alternative-fuel vehicles are hitting the market this year, from the minivan segment's first hybrid, the Chrysler Pacifica Hybrid, to GM's all-electric Chevrolet Bolt EV. But will the battery industry be able to keep up? A Reuters report says it's preparing for a looming shortfall.
The report says demand for battery-grade lithium will soar in the next decades, matching demand for electric cars as consumers try to reduce their carbon footprint. According to Morgan Stanley analysts, hybrid and electric cars currently make up 1.1 percent of the market, but the agency predicts the production and use of electric cars to rise to 2.9 percent of 99 million new vehicles by 2020 and to 9.4 percent of 102 million new vehicles by 2025. By 2050, 81 percent of 132 million new vehicles will be electric, Morgan Stanley predicts.
Analysts forecast the shortage could also add to the cost of electric and hybrid vehicles, already more expensive than their gasoline counterparts. To prevent the shortage, industry experts say battery makers and other car manufacturers will need to sign multiyear deals that encourage large lithium producers to invest more and process more, faster.
Click here for the full story from Reuters.