It is time to start watching carefully a new opportunity provided by the very fast growth in Energy Storage business. This video from Teslanomics is a very good overview of what is happening in the sector under Tesla leadership. Energy Storage will overtake electric cars in the demand for lithium batteries in the not so distant future.
Electrification of our Transportation and Energy Systems will disrupt $4 Trillion and $8 Trillion industries respectively. After Tesla Earthquake, which is bringing us electric cars to start the mass market, The Tsunami of Energy Storage for Solar and Wind is coming. The average cost of energy distribution in the US is 5 cents per kWh, it means that Roof Solar kills everything else at this price. Just the cost of transmission makes any other sources of energy more expensive. We are getting closer to this tipping point very fast with the drop in all related costs for Solar Systems.
Lithium is the magic metal at the very heart of This Energy rEVolution, below you can find more links to start your own research and what is driving the quest for secure lithium supply among the major industrial groups now.
Energy rEVolution And Elon Musk's Grand Plan To Power The World With Lithium Batteries Fully Charged: Tesla Powerwall 2.
The most interesting in this brilliant video from Fully Charged is that solar panels and Tesla Powerwall 2 are working perfectly well even in the UK. The message is very simple: the world is going to the Distributed Energy Generation and lithium batteries make it possible. By the way, if you are lucky to have your own house you will need 2 lithium batteries in your household in the future: one for your electric car and another one for your solar system. You will start saving money from the day one, but the initial capital investment will be still very significant for the majority of people.
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The real mass-market adoption will come once you will be able to buy your Solar System, Lithium Battery and Electric Car all in one package and "pay as you" with quarterly payments which will be lower than you are spending now on electricity and your car. This future is very close now and Tesla has everything ready to take the market by the storm once they are ready for mass production of Tesla Model 3, Powerwalls and Solar Roofs. We have Elon Musk's Grand Plan To Power The World With Batteries in action.
My lower estimate for future demand is that 36 million tonnes of LCE (Lithium Carbonate Equivalent) must be produced by 2040 in order to meet the IEA's target for the 600 million electric cars necessary to keep global temperature increase below 2%. However, over 100 million tonnes of LCE will be needed if all new cars are to be electric by 2040, this being one of IMF's scenarios for the future. Now let's just start adding here the Energy Storage for Solar and Wind Power Generation.
Our starting point for electric cars is just over 1% of total auto sales in the world and only 200,000 tonnes of LCE produced in 2016. The dramatic increase in demand for lithium will require accelerated production from all known reserves of lithium and new resources will need to be found and put into production, this being crucial to the Energy rEVolution.
At International Lithium, we are very interested in processes developed for the recovery of Lithium Hydroxide directly from brine. Lithium Hydroxide is the highly sought strategic commodity which is used in lithium batteries as Tesla and Panasonic are doing for example at Tesla Gigafactory. Read more.
Elon Musk TED Talk: We Need 100 Gigafactories To Go 100% Renewable Energy And Tesla Will Announce 3 or 4 This Year.
Elon Musk was making his Ted talk recently in Vancouver and you can experience his ability to distort reality in our Lithium Universe first hand. Among very many mind-boggling ideas he reiterated that we will need 100 Tesla Gigafactories to move to 100% Renewable Energy for the whole world and Tesla will announce 3 or 4 new Gigafctories this year!
Gigafactory 1 has tripled its production goal to over 100 GWh per year and China has announced to add more than 120 GWh production capacity per year as well. Security of Lithium Supply becomes the major competitive advantage for all major players in this phase of Energy rEVolution which is going into the mass market exponential growth stage with electric cars and Energy Storage Systems. Read more.
Tesla Officials Visit Argentina’s Governor Of Salta For Solar And Storage Projects And Sourcing Lithium.
ElectTrek reports that "salt on the salad'": this is how Elon Musk has described lithium before - must be very important for Tesla's digestive system after all. I am writing here extensively about the coming control of the Lithium supply by Chinese companies who are very aggressively buying all the best lithium projects worldwide. It is very difficult to pretend anymore that any lithium will be coming from any signed by Tesla agreements with some junior miners in the nearest future. Lithium cathode is still produced by Panasonic for Tesla Gigafactory. Read more
Another part of this story is the rising price of lithium in China again. Last year we have seen only 14% rise in lithium supply and prices have increased by 74%. In December, Benchmark Minerals has reported that LCE (Lithium Carbonate Equivalent) was priced below $15k/T and Lithium Hydroxide (the particular lithium based chemical which is used in Tesla batteries) was around $18k/T. Last week I have received reports that in Shanghai LCE was priced at $18k/T and Lithium Hydroxide was at $22k/T. Today there are reports that LCE is already pushing $19k/T. It is all happening just before 4 major Lithium batteries Megafactories will be coming online in China this year and Tesla will move into the mass market stage with the production launch of Tesla Model 3 in July.
As you know, I have been preaching for years that security of lithium supply will be the most important factor determining the competitive advantage among different producers of critical raw materials for the Energy rEVolution. This Lithium Race will have the very far-reaching geopolitical implications. Now it looks like that Tesla is realizing that there is no secure supply of lithium for its massive expansion of operations from the underneath of Gigafactory floor in Nevada. Even if Panasonic is producing cathode for lithium cells which are made at Tesla Gigafactory in Nevada the supply chain is going all over the globe and back to China.
The real test to the market and supply chains for Energy rEVolution will come with the coming tide of Electric Cars and the following tsunami of Energy Storage. Bloomberg has recently reported that there will be more than 120 models of electric cars by 2020 and you should not be surprised as we have discussed here before that there are more than 70 models of electric cars on sale in China already. The next few years will determine who will have the keys to the new Energy rEVolution and control the supply chains. Hungry Dragons are flying high already and mostly in China, the question remains who and how will feed them without fear of being burnt in the process.
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