Toyota Bets Heavily on Lithium
by The Lithium Review on June 10, 2013
Toyota Motor Corporation (NYSE:TM) and Toyota Tsusho (South Sea) Corp (TYO:8015) have recently made significant investments throughout the lithium supply chain. Their investments now cover a direct Joint Venture with a junior lithium explorer in Argentina, a major ramp up in production for large format lithium based batteries and the mass roll out of the Toyota Prius Plug in Hybrid Electric Vehicle (PHEV).
Direct Investment in Low Cost Lithium Extraction
Toyota Tsusho established a Joint Venture (JV) with Australian based, Orocobre Limited, who is working at bringing on line a low cost lithium brine project in Jujuy, Argentina. The Olaroz lithium project being developed by the JV has an estimated construction cost of US$229million including contingency. The project is fully funded through the Mizuho Corporate Bank and joint equity contribution by Orocobre and Toyota. Orocobre holds a 66.6% ownership while Toyota stands at 25% and the Juju Province Mining and Energy Company (JEMSE) at 8.5%. Projected production is expected to reach 17,500 tonnes per annum of low-cost battery grade lithium carbonate.
Consumer Demand for Lithium Based Automobiles
The Toyota Prius Plug-in Hybrid (PHEV) manufactured by Toyota Motor Corporation, was launched into select international markets in 2012. The Prius PHEV is based on a third generation Toyota Prius but is outfitted with a 4.4kWh lithium ion battery system. The standard Prius Hybrid are designed with Nickel Metal battery chemistries, which are bulker, heavier, and more costly, although they offer key technology advantages in non- plug in hybrids. Since the soft launch, several publications have reported that worldwide sales of the Prius PHEV now exceed 31,100 units. 15,103 units were sold in the USA and 4,417 units sold throughout Europe as of the end of March 2013. Total Prius PHEV sales represent over 136MWH of battery capacity, an extremely bullish number for the lithium supply chain. Toyota is forecasting another 15,000 units to be sold in the USA by the end of 2013 matching 2012 sales figures.
USD$194 Million Lithium Ion Battery Facility
Lastly, the Nikkei Business Daily recently reported that Toyota Motor Corp is planning to increase production of their lithium ion batteries by six times. It is reported that a new production line is being planning at a cost of USD$194Million. This would allow production to have an output capacity of 200,000 units per year. The report did not include if Toyota will begin to outfit all their Prius models with lithium ion batteries or only the PHEV model.
Toyota’s recent chain of announcements indicates a long term industry shift to lithium based automobiles. Also consider the potential if the Camry and Highlander hybrid models shift away from Nickel Metal batteries to Lithium Ion. Toyota’s bold push into the lithium space is simply game changing.
By The Lithium Review Editors
Securities Disclosure: None of the editors at The Lithium Review hold positions in any company listed nor do they intend to initiate any position within the next 72 hours of publishing this article. Neither The Lithium Review nor any of its editors received compensation for completion and posting of this article