A lithium supply deal was recently entered by Toyota Tsusho Corp. and Orocobre Ltd., ensuring that Toyota Motor Corp. would have stable production. Toyota Tsusho is a sister company of Toyota and is in fact, a trading house that's 22%-owned by the worldâ€š largest automaker. The deal made in Argentina with the Australian-listed Orocobre would certainly help Toyota maintain its lead in gasoline-electric hybrid cars.
Demand for lithium, a highly reactive and versatile metal, will be increasing as carmakers prefer the costly but more efficient lithium-ion batteries to power hybrid and electric vehicles.
The current Prius hybrid uses nickel-metal-hydride batteries but Toyota has decided to use lithium-ion batteries for future plug-in hybrid models.
Yoshihiko Tabei, chief analyst at Kazaka Securities, said that the main hurdle to the mass production of hybrids is the shortage of batteries. After the deal with Orocobre was reported, its shares rose by as much as 47% to a record high of A$2.04 about $1.87) in its heaviest ever trading volume.
The stock has risen almost tenfold in the past 12 months, and closed up 32% at A$1.85. Toyota Tsusho rose 6 percent, while Toyota Motor's stock was down 0.9 percent, roughly in line with other auto shares.
Orocobre spokesman Paul Ryan said that the Salar de Olaroz project in Argentina is estimated to cost about $80 million to-$100 million. The final figure will be determined after a feasibility study that should be complete by the end of September.