That’s the question Erik Bethel asks in a new study of the electric-vehicle and consumer-electronics markets. His answer is an emphatic yes, and his advice to China is to hurriedly make deals to lock up South America reserves, where 75 percent of the known deposits lie.
Lithium demand for electric car batteries could well outstrip worldwide production. That's not considering consumer electronics.
He could be right about China. But what is most certain is this: Lithium could remake the global economy in the unfolding century in much the same way oil brought economic power to the U.S. and Western economies during the last.
This time around, the economic dislocation may be more equalitarian than it was in the past 100 years.
Already international companies are staking claims in Chile and Argentina, where the metal is being mined. Companies such as Toyota and Orocobre of Australia have put money down. Magna International of Canada, which supplies Ford, has reached into its pocket as well.
In Bolivia, which is often unfriendly to outside investment, test mines are being dug.
The U.S. has warm relationships with Chile, the world’s largest producer, so there is no suggestion access by American firms will be blocked. The question will be price. And that is important because this time it seems clear the U.S. will not be able to rely on its modest lithium deposits in Nevada and in North Carolina, where extraction is presently too expensive.
Yet the biggest wild card may be China itself, which has the world’s fourth largest deposits. What most people don’t know is that China has known reserves of lithium in easy to mine salt-lake deposits in Qinghai Province and Tibet, notes Bethel in his new study. Its total reserves of 2.7 million tons are almost equal to Chile’s.
China has the fourth largest lithium reserves in the world. (Source: SinoLatin Capital)
The challenge for the nation is development since the silvery metal with better energy intensity than nickel lies in remote areas with little infrastructure, says Bethel. Train lines and highways need to be built. However, China’s ambitions in electric car manufacturing certainly make development and investment abroad seem likely.
That will put pressures on the U.S. The Department of Energy is pouring billions of dollars in the battery and electric car companies. In California alone 12 different manufacturers are designing electric and hybrid cars – including Tesla Motors and Fisker – hoping to out maneuver the Big Three, which also have cars on their drawing boards.
But seeking the lithium to make enough batteries is going to become expensive. Optimistic estimates suggest there could be as many as 6 million electric and hybrid cars in use around the world by 2018. Their batteries will require approximately 18,000 tons of lithium, or more than the entire global output in 2008. This doesn’t even take into account a rapidly expanding consumers electronics industry.
Demand is ready to skyrocket. Price, too
During the last century, the U.S fueled its growth with plentiful oil. This time around, the lithium is not.
Posted by Mark Boslet 
