With the advent of the latest electric cars, pioneered by companies like Tesla, there has been an increase in demand for Lithium ion. This crucial raw material, which could one day compete directly with oil, has very different characteristics that might preclude it from replacing crude in the same way that the latter is replacing coal. The differences between both raw materials may serve to prove that oil is here to stay, at least for some years to come.
Beyond the costs of shifting the economy away from oil, it is important to understand that the lithium mining industry is underdeveloped, with a very high concentration of the mineral in very few places. This has the potential to create the kinds of barriers to entry that promise to keep the price of lithium high if demand continues to grow. On the flip side, oil is more abundant than previously thought, and pretty well spread out across the globe, minimizing risks to supply.
The other main characteristic of lithium that may put it at a disadvantage, is the fact that it is used to store energy and not to generate it. Oil is used to generate energy and it is a very reliable source of energy since it stores the energy it supplies. Charging millions of vehicles may put too much pressure on the power grid, which in turn might have to recur to fossil fuels to keep up with demand. With the price of oil holding below $60 USD per barrel, and the power that fracking technology has to keep the price subdued, lithium is facing market challenges way beyond its availability. It seems that in the battle between oil and lithium, oil has the upper hand for the foreseeable future.
