This observation from Forbes is very important to the understanding of how fast the exponential part of S-curve for mass market adoption rate of the electric cars will grow. We have just crossed 1% in global auto sales for electric cars and now Tesla Model 3 will ignite the attack on the ICE Age worldwide. The Economist is writing about the death of the ICE engines and the next news about the critical issue of security for lithium supply will hit the headlines. So far Chinese companies are very happy buying at the floor level valuations all the best lithium projects in the world. When will the West wake up finally?
Tesla Model S and X have made 45% of all electric cars' sales in the US this year! They are the best electric cars, but they are the most expensive once as well. Somebody has put it brilliantly about Tesla Model 3: "We had the best electric cars and we had the affordable electric cars. Now we have the best affordable electric car".
BYD is very proud to be back on the wave in China in July with over 11k EVs sold, it gives us over 130k per year EVs sold annualized. Elon Musk is talking about the rate of production with 20k Teslas per month by the end of this year and over 500k per year by the end of 2018. Now he estimates the demand for Tesla Model 3 at 700k per year. Bloomberg estimates that we will be able to choose from 200 EV models by 2020. The market is not even close to the proper translation of what kind of EV tsunami is coming and how it will affect the demand for lithium and other energy metals.
Lithium is the magic metal at the very heart of this Energy rEVolution. International Lithium is plugged into the very dynamic EVs and Energy Storage markets in China with its holdings in JV projects with Ganfeng Lithium, a giant from China.
Elon Musk: "What People Should Absolutely Have Zero Concern About Is That Tesla Will Achieve A 10,000 Unit Production Week By The End Of Next Year."
Elon Musk has revealed a few very interesting details about Tesla Model 3, upcoming Gigafactories and the future for lithium batteries during Tesla Motors, Inc. Second Quater 2017 Financial Results Q&A conference call. Today I would like to touch on the incredible rate of production he is planning to achieve in just one year time.
You can listen to the call here.
The following extracts are from Seeking Alpha transcript:
Elon Musk: "What we have ahead of us, of course, is an incredibly difficult production ramp. Nonetheless, I think we've got a great team, and I'm very confident that we will be able to reach a production rate of 10,000 vehicles per week towards the end of next year. And we remain – we believe on track to achieve a 5,000 unit week by the end of this year.
So, I would simply urge people to not get too caught up in what exactly falls within the exact calendar boundaries of a quarter, one quarter or the next, because when you have an exponentially growing production ramp, slight changes of a few weeks here or there can appear to have dramatic changes, but that is simply because of the arbitrary nature of when a quarter ends.
But what people should absolutely have zero concern about is that Tesla will achieve a 10,000 unit production week by the end of next year."
And this is why people will be buying these cars:
Elon Musk: "In the case of Model 3, we're strived hard to simplify and make sure that it has everything essentially to be a fantastic car. If you see the reviews, the reviews are – one could not ask for better reviews. And I just thought I'd give you one little anecdote, which was – which I found quite surprising is that when we were giving test drives to – or the journalists were driving the car and doing test drives. About 80% of the journalists said that they would buy the car themselves. Most of the remaining 20% said probably. This is crazy. I've never seen anything like it."
To put it into perspective: by the end of 2018, Elon Musk is aiming for production of 520,000 electric cars per year. It took GM 7 years to sell 100,000 Chevy Volts. Backed by Warren Buffet BYD, which is the largest electric cars manufacturer by now from China, has managed to produce and sell more than 100,000 EVs in 2016. Elon Musk will be making 5 times more per year by the end of next year at Tesla. This is why we are talking about the mass market for electric cars here. Lithium is the magic metal at the very heart of this Energy rEVolution.
Lithium Race At IMF: "Electric Cars Can Replace Motor Vehicles In The Next 10 To 25 Years."
Now IMF joins top financial institutions with its own very bold prediction: "Electric Cars Can Replace Motor Vehicles In The Next 10 To 25 Years." We are talking here about all cars being electric much faster than a lot of people think. Elon Musk with Tesla Model 3 launch is showing that "The Best Affordable Electric Car" is here and its mass production has started. 143 models of electric cars which will be available in the West by 2022 are announced already and there are more than 70 models of electric cars on sale in China now.
Please note that in IMF's view for the electric cars my forecast of 36 million tonnes of LCE (Lithium Carbonate) to be produced by 2040 is very conservative and must be tripled in order to accommodate this transition to a fully electric fleet of new cars. According to The Economist, in the case of all new cars being electric by 2040, this fleet will count 1.8 Billion electric cars. We are talking here about over 100 million tonnes of LCE being produced by 2040 in order to make it happen. The starting point today is 200,000 tonnes of LCE produced in 2016.
Lithium is the magic metal at the very heart of this Energy rEVolution. International Lithium is plugged into the very dynamic EVs and Energy Storage markets in China with its holdings in JV projects with Ganfeng Lithium, a giant from China. Finally, some buying volume is coming back into the market of lithium junior miners, investors are getting the message. Read more.
"We are finally moving into the mass market stage for EVs and related news is coming from all over the world. ElecTreck reports that Daimler is now announcing a new $740 million lithium battery factory in China. This project is a part of Daimler's new investments in JV with BAIC to build electric cars in China. Major automakers are not only decisively moving to electric cars like Volvo, but are trying to get a foothold in the largest auto market in the world in China. This announcement comes after we have learned about Tesla's negotiations in Shanghai to establish its own Gigafactory in China.Electric cars are coming much faster than a lot of people are anticipating it and lithium supply chains will be under pressure from the demand side. There are reports already that lithium battery packs are in short supply and this rising demand for batteries will be driving the demand for lithium raw material supply. We have a total disconnect in the marketplace between exponential growth in EVs and ESS adoption rates and capital available to develop new lithium production. M&A will be an answer for some aggressive market players like Chinese, who are accumulating lithium assets all over the world now. After SQM news we are entering the new phase for the assessment of all M&A opportunities in the lithium sector."
Insiders Are Buying Into International Lithium As Ganfeng Moves Mariana JV Forward In Argentina.
LEGAL DISCLAIMER
International Energy Agency: In Order To Limit Temperature Increase Below 2ยบ C The Number Of Electric Cars Needs To Reach 600 Million By 2040.
"The cost of lithium batteries is going down very fast and I believe that fully electric cars will rule the world very soon. Tesla Model 3 with 65 kWh lithium battery provides over 200 miles of range and will become the standard in the industry with its mass volume production from this July. There is around 60 kg of LCE (Lithium Carbonate Equivalent) in one Tesla Model 3 battery. We will need 36 Million Tonnes of LCE to be produced by 2040 to put this IEA plan into life.
To put it into perspective, the total lithium production last year was around 200,000 T of LCE. Now you can better understand why there is the real cut throat competition for the security of lithium supply which is still hidden from the most of the people by the clouds of toxic cancer hazard fumes emitted by all DIEsel cars on our roads. ICE (Internal Combustion Engines) are on the way out, all cars will be electric very soon and we are facing the total disconnect between the coming demand for lithium and the available supply. Read more."
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