Tuesday, 24 January 2017

Falling Lithium Battery Prices Are Driving The Exponential Growth Of Electric Cars.




We have the magic of technology in the making now. While ICE cars were becoming more  and more complex and more expensive with time, electric cars are enjoying The Silicon Valley laws of dramatically decreasing costs with "The Learning Curve." Lithium Batteries are the most significant part of the overall costs in electric cars and the costs are going down as fast as 19% per year, according to Bloomberg. Actually, the situation is already much better than presented in the article below. Elon Musk has announced long time ago that al-in-all cost of lithium batteries at Gigafactory is already $190/kWh! "I do not really know" why journalists are not digging enough information to stay current on the subject. Headlines like "Electric Cars Are Here To Stay" belong to 2009, not 2017 when they are getting to the milestone of being sold over a million per year.

Tesla Model 3 and GM Bolt will ignite the next phase of mass adoption for electric cars in the West attacking the exponential part of "The S-Curve." Both EVs are priced below $40k and provide the range of over 200 miles. The price of the average new car in the U.S. has skyrocketed to over $33k in 2016 and now these electric cars will be very attractive to the new buyers. When you will consider the overall cost of ownership these EVs start to beat ICE cars of the similar model class not only on performance but on cost as well! 

We are moving very fast with electric cars out of grasp by any politics and towards the economic decisions when customers will start voting with their wallets. This is the bifurcation point to put all ICE cars to rest in a decade. It will be impossible to sell cancer hazard 100 years old oil burning technology anymore. The Switch is happening right now when millions of people are deciding to buy new electric cars. 







Lithium Race Goes Exponential: More Electric Cars Are Sold In China Than In The Rest Of The World Combined.





"Reuters reports from the grounds of The Centre of The Lithium Universe. More electric cars are sold in China than in the rest of the world combined! I will not open the very big secret telling you that these cars are not the best in the world yet and sales are driven by the government subsidies, but just imagine what will happen when really best electric cars will be sold at the prices below $30k ... then in a couple of years below $20k? A BMW 2-type car with much better performance, cheaper and with 10% of the running cost of ownership? Multiply it on the opportunity provided by the largest auto market in the world and state level fight for the survival gasping for the fresh air literally. Then just make a few calculations related to coming California Style ZEV mandates...  


We have the major catalyst in the making in China right now. The whole country is leapfrogging into the 21st century with The New Energy Plan. Implications will be very far reaching and Lithium Market is just one of the signs of things to come when bottlenecks in the supply chains are reflecting the returned appetite from the Dragon. This Lithium Race is going into the exponential part of the S-curve now. Read more."





Lithium Race: Which Will Be The First Country To Ban Fuel-Burning Cars: Norway, Netherlands, Germany, India or China?






  Dr. Joe Romm provides us with more information on the recent decision of German Bundesrat to ban fuel-burning cars. This tipping point for electric cars to become the fast growing mass market is the result of the technological advance called "The Learning Curve" when doubling of production brings on average 26% in cost reduction. It is true for the price of Solar PV, it is even faster for the chip makers and for Lithium Batteries Bloomberg reports about 14-19% cost reduction every year.
  Now we are in the fast lane approaching this transition with first electric cars priced below $40k and with a range of over 200 miles coming to the market: GM Bolt and Tesla Model 3. BMW i3 with the new larger battery, Renault Zoe with 400 km range and Nissan Leaf with upgraded battery are driving the sales in Europe and China stands on its own with 25 companies making 51 models of electric cars. 
  Lithium Technology is here and the best electric cars will become only cheaper and better. Bloomberg estimates 2022 - 2026 when EVs will reach parity with ICE on capital cost alone. I will translate: depending on the country from 2022 electric cars will become cheaper to buy than comparable ICE ones. They will provide much better performance, safety and fraction of running cost to operate. This progress is inevitable and Tesla shows what is coming with Tesla Model S outselling ALL luxury sedan brands in the U.S. and Western Europe by a very wide margin. In the Q3 of this year, Tesla Model S sales were almost double of Mercedes S-Class and more than double of BMW 7!  
  And, finally, as Dr. Joe Romm is pointing out that governments start to wake up to the horrible cancer hazard air pollution on our streets from fuel-burning cars and voices for the ban of such cars are louder and louder.  We can already add Netherlands to his list of countries and I have put China there as well. Masters of the asymmetric warfare Chinese will definitely capitalize on the advance they have managed to gain with their New Energy Plan at the right time. China has the largest EVs market in the world, Warren Buffett-backed BYD is the largest manufacturer of electric carsChinese companies are the largest lithium chemicals producers for the lithium batteries already. Lithium Megafactories are rising with billions of dollars in investments and they are buying the best lithium projects to secure supply of this critical metal.
  If and when China will ban fuel-burning cars remains the speculation at this moment, but it will change the geopolitical landscape overnight making many Trillions of dollars in assets in the West worthless and some major companies literally shrinking in size within a year or two. We will have more Chinese names at the top of the World's largest companies for sure and size of the Chinese economy will jump reflecting the new growth based on the manufacturing base of the 21st centuryThis Energy rEVolution will be very fast and brutal to those unprepared. It is time to check your portfolios in order not to get caught in "The Death Spiral" - like Fitch is predicting for the oil companies. And whoever would like to start new trade wars should be thinking twice and long term in advance, like China is doing building secure lithium supply to power new Energy Plan and Electric rEVolution. With the diminishing role of Oil as the only source of Energy, will our world be able to have a peaceful transition to the new order? I will leave these worries to our brave politicians, you should think about your investments and on which side of the history you would like to be to make the difference. You can find my chronicles of this Energy rEVolution on this blog and below are some links for your own research including the Dr. Joe Romm article. Read more."




The Switch.


"I will throw a few numbers just to give you a teaser here. The rest is on this blog for those who are ready to learn. The cost of Lithium in your iPhone is $1 dollar, in Tesla's Lithium battery cost of Lithium is 2-3% in the price of the finished product. We are in a generational shift 2 to 7,000: 2 is the number of the batteries in your father's remote control, more than 7,000 is the number of lithium batteries in Tesla Model S. It takes 63 kg of LCE (Lithium Carbonate Equivalent) to build Tesla Model S 70 kWh battery. Every 1% increase in sales of Electric Cars as part of total auto sales brings new demand for 70,000 t of LCE. Total production last year was 160,000 -180,000 t of LCE. During all our humankind history 1,000,000 EVs were sold before 2015. This year alone we can get 1,000,000 electric cars sold. Worldwide we are still close only to 1% of Electric cars in total auto sales. BYD - EV automaker from China where Warren Buffett is holding a 10% stake, will sell this year 100,000 EVs, it took GM 7 years to sell the same amount 100,000 of GM Volts. China is talking now about California style Zero Emissions Mandate: 8% of all news cars to be electric by 2018 and 12% by 2020. Let's digest it for a minute. With sales of EVs now only above 1% mark, we are talking about the factor of 8X in  ... two years time and 12X increase in the number of electric cars produced in China by 2020! Now Goldman Sachs numbers can be really conservative: they are talking about 3 times increase in Lithium Demand by 2025. I am talking about the total disruption of $12 Trillion industries: 4$ Trillion Transportation and $8 Trillion Energy and Utilities. I am talking about all cars being electric very soon. 

Now you will better appreciate the following fact that International Lithium Strategic Partner Ganfeng Lithium has more than doubled its total sales in 2015 in just 9 months of this year!  We are talking here about Energy rEVolution and Lithium is the magic metal at the very heart of it. Only a few experts, as usual, do really know what they are talking about. Joe Lowry, Chris Berry and Andrew Miller from Simon Moores' Benchmark are taking the floor below.







   And The Switch ... The Switch is the coming tide when literally millions of people will be switching very fast (as fast as all those millions of EVs can be made) to the electric cars. GM Bolt will give us the first taste of what is coming. The first two electric cars priced below $40k and with a range of over 200 Miles will change everything. Tesla Model 3 will start the real flood of affordable electric cars which are just better than anything else at the same price from the ICE age. Despite all headlines about Electric Cars on my blog, 99% of all new cars are still powered by the last century technology of controlled explosions and by burning oil in different compositions while killing us all and our planet at the same time. Do you remember the 90s - The World Before The WWW and Information Revolution? Now we have 21st Century and Energy Revolution: The World Just Before The INTERNET. Read more."



Statista:

Can Falling Battery Prices Push Electric Cars?



"Would you consider buying an electric car if it were just as expensive as an equivalent model powered by a traditional internal combustion engine? I’m betting many people would. And while electric vehicles are still pricier than gasoline-powered cars, the advances in battery technology have come a long way in bringing down the prices of electric cars over the past years.

According to estimates from Bloomberg New Energy Finance published by McKinsey, the average price of battery packs for cars has dropped from $1,000 per kWh in 2010 to around $230 per kWh in the past year. How much of a difference does that make to the price of a car, you ask? A big one. Consider the Tesla Model S for example: The most popular electric car in the U.S. comes with a battery capacity between 75 and 100 kWh. If you decide on the model with 100 kWh, that car’s battery now costs around $23,000 as opposed to $100,000 a couple of years ago.

While price is not the only thing keeping people from making the switch to electric cars (range is another big one), it would certainly help if they weren’t so damn expensive. Should battery prices continue to drop over the next few years, it would go a long way to helping electric mobility escape its niche."