Monday, 12 September 2016

Lithium Race And Battery Assault.




  David Fickling made a great article connecting the real story of Lithium Race in China with Warren Buffett's BYD and Tesla in the U.S. Our very small industry is growing so fast now, that quite a few numbers and charts in his article are already off the scale.  My followers would point out that Elon Musk has already announced that Tesla can make a lithium battery with all-in-cost for $190 per kWh! GM has announced earlier this year that LG Chem can go as low as $145 per kWH for its Bolt lithium battery, but only for the lithium cells alone. Gigafactory now will actually produce 50 GWh of lithium batteries by 2018 and 150 GWh by 2022! I will provide a few links and charts with the latest numbers to make it clear why the Lithium 2.0 launch is for real this time.



Lithium Race: Tesla Model 3 Base Battery Less Than 60 kWh, “All-In” Pack Costs Already Under $190/kWh!



InsideEVs.


  "This is huge if Tesla Model S and X lithium batteries are already with "All-In" cost per kWh at $190! It is made on the very low volume and before Tesla Gigafactory. We are not even talking about the next step for Lithium Technology - Solid State Lithium Batteries. GM has reported before that GM Bolt will enjoy $145 per kWH pricing, but LG Chem was not very happy with that announcement - I personally suspect that LG Chem was going very aggressive in that pricing just to get into the first electric car for the mass market from GM. All recent developments are pointing out that adoption for Electric Cars will surprise everybody and this tide is coming to take the world over very fast. Read more."


Elon Musk Launches Tesla Gigafactory: The Goal - Exit The Fossil Fuels Era As Soon As Possible.





  "Elon Musk: "Gigafactory is the giant machine, we had to design it as a product - as a machine building other machines. We have just to build it and it has to be big, very big. Because the world is big. We could not find enough lithium batteries for our cars. Total lithium batteries output in 2014 was 30 GWh, Gigafactory will produce 50 GWh in 2018 for 500,000 electric cars and 150 GWh at full capacity for 1.5 million electric cars and Tesla Energy." Read more.






Warren Buffett's BYD Chasing Panasonic In Lithium Race: EV Lithium-Ion Battery Suppliers Outlook For H1 2016.



InsideEVs.


  "Now we know who is feeding exactly this enormous growth of electric cars in China. InsideEVs provides very interesting data on the state of our lithium race for EVs lithium batteries market. Panasonic is still holding the number 1 place with 36% of the market, "but in terms of growth BYD is second to none moving up by more than 300%!" Now Warren Buffett's BYD claims 18% of this market. The first half of 2016 has seen an increase by 81% to nearly 8.5 GWh of lithium batteries capacity. As you can see, there is no Tesla yet on this chart at all! All lithium cells for Tesla are supplied by Panasonic. And there is no lithium under Gigafactory floor in Nevada. 
  Should we discuss the lithium demand picture again with 150 GWh of lithium batteries just coming from Tesla Gigafactory 1 by 2022 after initial 50 GWh in 2018? And what about another dozen of lithium batteries Megafactories all around the globe? 
  International Lithium strategic partner Ganfeng Lithium supplies Panasonic and BYD. Now this $4.5 billion giant from China finances International Lithium projects in Argentina and Ireland. Read more."



InsideEVs.



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 the 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. Read more."



Lithium Market Small But Complex. Canadian Junior And Chinese Partner Taking Long View.




"Right now, Ganfeng is advancing ILC’s Mariana project in Salta province, Argentina. In July 2016, ILC and Ganfeng co-announced that a $12 million budget has been approved to accelerate exploration and development at Mariana.



ILC president Kirill Klip noted that Ganfeng has a $4.5 billion US market cap holding 19 patents for lithium products. Klip said the $12.5 million will enable ILC to firm up the size of the Mariana resource and move forward its application for a pilot production plant on the property.                                                     
“This access to capital and Ganfeng’s advanced lithium extraction technology puts  International Lithium in an exceptional position to move our project forward,” Klip said.  He cited recent discussions about ILC’s project with senior officials in the Argentinian government as evidence that the country is enthused about foreign investment in natural resource development. Read more."



Bloomberg:


By David Fickling


Remember when Tesla's Gigafactory was going to be the world's biggest lithium-ion battery plant? By the time it reaches full capacity in 2020, it will be producing 35 gigawatt hours of cells each year -- more than the whole world manufactured in 2013. Impressive, huh?
Well, as Gadfly pointed out in July, there's a contender for Elon Musk's crown: BYD, the Chinese electric carmaker that already has about 23 percent of the market for large-scale batteries and is planning to ramp up to 34 gigawatt hours in 2019.
Dual Cell
BYD's planned ramp-up of lithium-ion batteries matches Elon Musk's ambitions
Source: Bloomberg New Energy Finance, Bloomberg
But wait, there's more. Contemporary Amperex Technology, another Chinese battery maker, is planning an initial public offering to help fund a 10-fold increase in capacity to reach 26 gigawatt hours by 2020, Bloomberg News reported Friday.
Giga Just Got Bigger
Contemporary Amperex Technology Co., or CATL, is another battery producer with big output plans
Source: Bloomberg New Energy Finance, Company data, BofA Merrill Lynch Global research
You then have to add in all the other producers that are increasing output. Consultants Taiyou Research put total production capacity by 2020 in the region of 130 gigawatt hours, leaving Tesla with a scant quarter of the market -- and that's probably a low estimate.
But wait! There's more more. All those new batteries powering the first few generations of electric vehicles will begin wearing out around that point, so electric carmakers will start buying them back, recycling the materials and using them to build more lithium-ion batteries.
Five gigawatt hours of pre-loved lithium-ion batteries will come on the market in 2020, according to Bloomberg New Energy Finance analyst Claire Curry, rising to 29 gigawatt hours in 2025.
SUN DOWN
If you're getting a sense of deja vu, it might be because solar panels went through a similar production spike over the past decade. That's not been great news for the companies that make them, which have seen module prices fall by nearly two-thirds. Analogous business-model problems plague the firms that hope to make money from installing all those cheap panels, as Gadfly's Liam Denning has written.
Lithium-ion batteries appear to show parallel economies of scale. The technology has a learning rate of about 14 percent, according to BNEF's Julia Attwood, meaning prices should fall by that amount every time production doubles. On that basis, the cost of battery packs could drop from $384 per kilowatt hour in 2015 to $182/kWh in 2025 and $126/kWh in a Gigafactory-scale plant by 2030.
Going Flat
Lithium-ion battery pack costs are set to plummet as production increases
Source: Bloomberg New Energy Finance
Assuming demand holds up, that's probably good news for the likes of Tesla and BYD, which should primarily be consumers of lithium-ion batteries and therefore benefit when prices fall.
Companies such as Samsung SDI, LG Chem and Panasonic that are more focused on making money by supplying cells should be more concerned. A market that's experiencing a gold rush is a great place to make your fortune, but it's prime territory to lose your shirt also.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net
To contact the editor responsible for this story:
Katrina Nicholas at knicholas2@bloomberg.net"