Why all cars will be electric? Because we have now lithium technology to make it happen. Cheap lithium batteries change everything. And we have people like Elon Musk who makes it happen. Just listen to the interview and look at his eyes. He is in the zone. And now others are following. We will try to cover the field where he still relies on good will of his Lithium cells suppliers. Everything else he can do now, we just need to multiply it and make millions of the best electric cars.
Below is my very personal view why security of lithium supply will play such a life changing opportunity. Not everybody believes yet that all cars will be electric and I can be totally wrong, but what will happen if Elon Musk is right? The good start will be to read his biography and I will provide a few links to dig into this subject.
Cheap Lithium Batteries Change Everything: EVs Sales Rising Exponentially And Solar Energy Storage Next.
"InsideEVs brings to our attention the major driving force behind the exponential growth of sales for EVs from the very low base. Cheap lithium batteries change everything. Tony Seba is the best to explain why all cars will be electric by 2030.Elon Musk with Tesla Motors is doing this trick and now Tesla Model 3 will ignite the real transition to the best cars which just happen to be electric.
Oil and Auto industry are poisoned by their own toxic cancer hazard emissions from diesel and gas powered ICE engines and still in denial at their own peril about the dramatic shift in technology announced by Elon Musk last month. Now even truly rEVolutionary estimations for the cost of lithium batteries by Tony Seba are not relevant any more.
Elon Musk has announced that Tesla can already produce lithium battery with all-in cost of $190 per kWh. Mass production of batteries at Gigafactory will bring cost even lower, next stage will be Lithium Solid State with prices at $100 per kWh and Tesla Model S and X with over 500 miles range. I believe that Elon Musk is already working on LSS at Gigafactory. Dyson has joined the lithium race as well and bought out Lithium Solid State pioneer Sakti3 with promise to invest $1 Billion to commercialise this technology. Lithium Air is still years away from the field applications, but this lithium technology promises to bring us batteries with cost below $100 per kWh and electric cars with 1,000 miles range. Solar Energy Home and Utility Storage Systems will benefit next from this dramatic decrease in technology cost and will become even larger market for lithium based batteries. We are talking here about disruption of $4 Trillion Transportation and $8 Trillion Energy Industries. Lithium is the magic metal at the very heart of this Energy rEVolution.
International Lithium continues to build vertically integrated lithium business with $4.5 Billion MC giant from China Ganfeng Lithium and now we have 3 Lithium projects in our Upper Canada Pool to secure lithium supply for the West and North American market. Read more."
Lithium 2.0 Launch: Security Of Supply - Galaxy Resources To Buy General Mining In Lithium Takeover.
"This chart of lithium price in China is keeping awake at night very many people now in our very small industry. Quite a lot of them have totally missed the launch of Lithium 2.0 and now security of supply is the major geopolitical issue. Tesla is still relying on Panasonic to supply lithium cells and a lot of people are relying on the "Lithium Found in Nevada" under Tesla's Gigafactory floor.
Ganfeng Lithium: $4.5 billion giant from China is the strategic partner of International Lithium and now financing two of our J/V operations in Ireland and in Argentina. We are going where Lithium is and not just the hype around it. As we have discussed before, Lithium 2.0 is now for real as we have the real electric cars finally on the road and GM Bolt and Tesla Model 3 bring us mass market for electric cars. Cheap lithium batteries change everything. Exponential growth in EVs sales is following by deployment of Energy Storage now.
This Lithium M&A is pointing out another very important quality of Lithium 2.0 Launch: separation of dreams from the real people with the real projects, capital and technology to put them forward. There are only very limited number of quality lithium projects and even less capable teams with access to the capital and technology, like in the case of International Lithium and Ganfeng.
Galaxy is back from after the death experience and moves into the "New Lithium Top Six" taking over the "Old Lithium Big Three". Albemarly, SQM and FMC are being chased by very aggressive Ganfeng Lithium and Tianqi from China. Now we can add Galaxy to this very small space for investors to play around with security of lithium supply for the future when all cars will be electric. That chart of lithium price shows what is happening when in the last 5 years out of 80k T of LCE expected new production annually only 18k T was put on-line and when Gigafactory and Megafactories are only coming on.
Now is time to check out the Gigafactories Game of Lithium Demand:
Before we were talking about:
1. Tesla Gigafactory 1 with 35 GWh and cost $5bn in Nevada, US.
2. LG Chem with 7 GWh and cost $0.5bn in China.
3. FOXCONN with 15 GWh and cost $0.81bn in China.
4. BYD with 20 GWh in China - Warrenn Buffett owns a stake in BYD, leader of EV sales in China.
5. Boston Power 10 Gwh in China - Ganfeng Lithium ILC partner owned 10% of Boston Power.
Total: 87 GWh - point of reference: total world lithium batteries production in 2013 was 35 GWh.
Now we have to add here:
- 17 lithium battery start ups in China, totally unquantifiable number and I will leave it out as speculative.
6. BYD plants in Brazil and Argentina.
7. Panasonic in China.
8. LG Chem in Europe.
9. Mercedes in Europe.
10. A123 in Europe.
11. BMZ with 30 GWh planed capacity in Germany, Europe.
12. Volkswagen with $11.2 cost planed in Germany, Europe.
Total: more than 117 GWh of new lithium batteries capacity.
Now you can appreciate that my scenario of lithium demand doubling within next 5 years as the conservative one. Only Tesla with its plan of 1 million EVs produced by 2020 will consume at least 60 GWh of lithium batteries capacity assuming the average of 60 KWH batteries per EV. Knowing the Elon Musk's maniacal insistence on producing the most of all components in-house, we can add Gigafactory 2 in Europe as well to the list above.
Where all this lithium will come from? This is the very good question to ask the best experts at coming Benchmark Minerals Intelligence Lithium Batteries Supply Tour 2016, which will start in London on June 6th at UBS. I will give you a teaser and few links on this blog to dig out your own conclusion. Albemarle is the top lithium producer now. SQM is struggling with political issues, FMC is struggling with lithium production and both are producing Lithium for less than 20% of revenue. It means that even if you can technically produce more, you have to sell 80% more of other products as fertilisers as well. Ganfeng and Tianqi are taking the market by the storm and both are in fierce competition. Now Tianqi controls Talison with Abemarle (Abemarle has acquired Rockwood Lithium) and Ganfeng is buying lithium spodumene from Talison and lithium brine concentrate from SQM. It is not very well constructed base for the exponential growth and at AGM on 21st of September 2015 Ganfeng Lithium has officially informed its shareholders: "its major risk is the security of lithium supply." Ganfeng has invested in Neometals and approved budgets for International Lithium J/V projects in Ireland and Argentina. Ganfeng owns 15% stake in International Lithium. The presentations below will provide you with more initial information for your due diligence. Read more."
It took International Lithium 7 years of building its Lithium business and 5 years of partnership with Ganfeng Lithium: $4.5 billion market cap giant from China - to receive this acknowledgement to celebrate our 5th IPO anniversary: Watch the video."
"Ganfeng has a strong commitment to supply Lithium product to various industries worldwide,” stated Ganfeng’s Director, Wang Xiaoshen, “so we clearly have a vested interest in these projects and have been very hands-on in the evaluation of ILC’s properties. Our company is the only one in the world that has commercial production capacities to extract Lithium from both brine and spodumene, and we continually implement cutting-edge technologies to our processes. I feel confident that this is a fit for our operations and the potential these projects hold."
Race For Renewable Energy Technologies Charges Lithium Market. Chinese Lithium Leader Secures Supply Sources.
Here is the link to answer all your questions why Lithium will power us for the next 50 years and after that Robots:
International Lithium And Ganfeng Lithium Commence Drilling At The Avalonia Lithium Project, Ireland.
International Lithium And Ganfeng Lithium Begin Drill Program At The Mariana Lithium Brine Project In Salta, Argentina.
International Lithium And Pioneer Resources Plan Drilling For The Mavis Lithium Joint Venture Project, Ontario, Canada.
Please carefully read my legal disclaimer, nothing on this blog represents investment and/or tax advice. Please always consult your qualified financial adviser before making any investment decisions.