Is Tesla Motors' (NASDAQ:TSLA) Model S environmentally friendly? Well, thanks to its battery chemistry, the considerable environmental and social effects of lithium mining, and the battery's manufacturing carbon debt, the Model S isn't nearly as green as people want to believe.
Of course, advocates of Tesla Motors are quick to point out that recycling the battery can help, and produce a scenario in which lithium, or Li, can be mined once, and then continually recycled in EV batteries. But is that truly possible? Lets look at recycling, and what it could mean for Tesla Motors' batteries.
Bring on the science
There are three essential components to a lithium-ion, or Li-ion, battery: an anode (negative electrode -- often made from carbon), a cathode (positive electrode -- metal oxide such as lithium-cobalt oxide), and an electrolyte (conductor -- such as lithium salt). These components allow for the transfer of lithium ions.
According to Tesla Chief Technology Officer JB Straubel, the battery Tesla uses for the Model S is a Panasonic (NASDAQOTH:PCRFY) 18650-form-factor cell that utilizes the chemistry of nickel, cobalt, aluminum, and lithium ions for the battery's cathode material -- represented as LiNiCoAlO2, and often called an NCA battery. Additionally, SAE International reports that Straubel said of the battery: "We've totally custom-engineered that cell working jointly with Panasonic to create. It's an automotive cell, tested to automotive standards. It doesn't go into laptops anywhere."
Further, while lithium is an essential component in this battery, it's nowhere nearly as expensive as cobalt and nickel, which are also contained in Tesla's cathode. This is especially important to keep in mind when it comes to recycling.
In 2011, Tesla announced it was working with Umicore and Kinsbursky Brothers to recycle its batteries. Of course, since then, Tesla CEO Elon Musk has strongly hinted that the company will build a "giga" lithium battery factory, which will include the ability to recycle its batteries. However, until Tesla does, there's no way to evaluate the factory's recycling ability. So lets look at Umicore's existing process -- a world leader in recycling -- and see what the state of battery recycling is now.
Currently, Umicore uses a process called smelting to extract nickel, cobalt, and other valuable metals from batteries. These metals are further refined, transformed, and can be reused in a battery'sLiMeO2 cathode (Me represents a transitional metal such as nickel, cobalt, or manganese) using newly purchased lithium -- not recycled. In addition, the smelting process burns the electrolyte and carbon anodes, and produces what's called a "slag fraction," which is where all the lithium ends up. This can then be used in construction materials -- like cement.
Moreover, while it's possible to recycle lithium from slag by using a hydrometallurgical process, the preceding process doesn't do so. This is because lithium is a low-value element and, right now, it's not economical to recycle it. So, while the EPA estimates that 80%-90% of lithium is recoverable from recycling, it's important to note where it goes, exactly. In Umicore's case, into slag -- not a battery.
Unlike Umicore, Kinsbursky Brothers, along with its joint venture partner Toxco, uses a hydrometallurgical recovery process, which is able to recover dissolved electrolyte and lithium salts. This is then further processed to become lithium carbonate. Unfortunately, this process doesn't recycle as much of the battery. In fact, the EPA reports that four streams result from hydrometallurgical recovery: copper cobalt product (a mixture of copper, aluminum, and cobalt), cobalt filter cake (a mixture of cobalt and carbon), Li-ion fluff (a mixture of plastics and some steel), and lithium brine (dissolved electrolyte and lithium salts). The EPA states:
The copper cobalt product and cobalt filter cake, which comprise about 60% of the battery feed, are sold for further processing to metal refiners. The Li-ion fluff (about 30% of battery feed) is either disposed or sold to steel refiners. The fluff may contain as much as 65% steel, depending on the battery feed. Finally, the brine undergoes further processing, where it is recovered as lithium carbonate.
Moreover, Argonne National Laboratory points out that even once a battery is recycled, the active material may be degraded, and the number of reuses might be limited for some of the material. Thus, it can't necessarily be reused in high-performance batteries, like those that are used in EVs.
But, but, CLOSED LOOP!
When someone says, "closed loop recycling," it's important to understand what that means. Basically, it's when a material, or an element -- like cobalt or nickel -- is recycled and reused in another battery. However, it doesn't mean that 100% of a battery is recycled and reused, or that the battery using the recycled material is the same as the original battery.
In addition, while recycling can help reduce the need to extract fresh material, and therefore the environmental impact associated with producing said material, recycling isn't without its own energy requirements. Further, the Center for Transportation Research and Argonne National Laboratory states, "We see that a large percentage of the battery life-cycle energy, which is consumed during battery manufacturing using predominantly electricity, cannot be recovered by recycling."
Other things to consider: The few recycling processes currently in use are processes that can absolutely improve -- and no doubt they will. But, the Center for Transportation Research and Argonne National Laboratory estimates that even if by 2050 lithium becomes highly recycled, it won't eliminate the need for virgin lithium. In fact, the demand in 2050 will still be four times the current demand, even with high lithium recycling rates. Further, they say that reusing batteries -- for things like storing energy from photovoltaic panels -- will delay the return of material for recycling, and that will actually increase peak demand for virgin material.
What all this boils down to
Recycling is absolutely essential and something we should invest in. Unfortunately, it's not a magic solution for Tesla's battery problem. The fact is, Tesla's battery cathode contains nickel and cobalt, and the EPA states that "batteries that use cathodes with nickel and cobalt, as well as solvent-based electrode processing, have the highest potential for environmental impacts, including resource depletion, global warming, ecological toxicity, and human health."
Furthermore, in order to obtain lithium in its pure form, it must be mined through hard rock, or salar brines -- the most popular method. Friends of the Earth, Europe states:
The extraction of lithium has significant environmental and social impacts, especially due to water pollution and depletion. In addition, toxic chemicals are needed to process lithium. The release of such chemicals through leaching, spills or air emissions can harm communities, ecosystems and food production. Moreover, lithium extraction inevitably harms the soil and also causes air contamination.
And last, but not least, Climate Central states that when using a current average U.S. grid mix of electricity, in 46 states, Tesla's Model S is the least climate-friendly EV, and it's worse than all but two hybrids when it comes to CO2 emissions over 100,000 miles of driving. Consequently, without a significant change to its current battery chemistry, it's unlikely that Tesla Motors will be the future paragon of green auto technology. As such, this is something potential Tesla investors should consider.
Katie Spence has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.