Car battery technology is subject to the same flaws that plague all technologies in the modern age: yesterday's cutting-edge is today's obsolete. Although lithium-ion (LI) cells are much more advanced than the barely evolved nickel-metal hydride (NiMH) batteries used in first generation Priuses, the bloom is off the rose and many of the LIs' shortcomings are becoming obvious.
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The primary drawback of LI batteries is their cost, which currently makes competition with internal combustion power plants prohibitively expensive. Lithium itself is expensive and difficult (and dirty) to manufacture, and the other metals often used in LI battery packs (like cobalt) are little better. There has been a great deal of speculation about whether or not the demand for lithium will create enough market supply to bring the price down, but that remains to be seen. There is already so much demand for the metal in portable electronics devices that we've probably already seen the biggest price drop that we're going to.
The biggest danger inherent in LI batteries is their well-documented tendency to burst into flames when overcharged. This is caused by an effect called "thermal runaway," which is similar in concept to a nuclear meltdown. When one part of the LI battery's internal component overheats, it causes a cascade effect among the rest of it and chaos ensues. However, companies like Valance Technologies and A123 Systems are currently experimenting with LI batteries that use phosphate instead of cobalt (the element that causes thermal runaway), but are still working on increasing the power density of their modified batteries to match that of a standard LI.
This isn't so much a "problem" for LI batteries, which (compared to older designs) have excellent power density per pound, but modern technologies are rapidly making them obsolete. Lithium ions can store only a certain amount of amperage, and can discharge at a rate only slightly better than NiMH. More modern lithium-air batteries use oxygen from the air to act as the battery's cathode, as opposed to the heavy metals used in standard LI batteries.
When compared to NiMH batteries, LI batteries have a shorter life, and will need to be replaced sooner. The LI's high internal resistance also means that constant recharging and discharging shorten this lifespan even further.
Lithium ion batteries are also easily damaged: high-voltage spikes and high external temperatures (anything over 32.2 degrees C) will cause a significant reduction in the battery's storage capacity, and allowing the battery to completely discharge may kill it altogether. Even though the LI's self-discharge rate is lower than that of a NiMH, it will still happen over a few years' time if the battery is not recharged.
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