Thursday, 15 September 2016

Security Of Lithium Supply: Battery Maker Helping Power China Electric Car Boom Plans IPO.


  While we are all (apart from short sellers) enjoying the news coming out from Tesla about its Gigafactory progress the real Lithium Race and cut-throat competition are happening in China. Warren Buffett's BYD is going after Panasonic with its aggressive plans for lithium battery Megafactories all over the world and now Bloomberg reports that CATL is going after BYD. 
  This competition will bring the prices for lithium batteries down to the Holy Grail for electric cars of $100 per KWh. Then battery for Tesla Model 3 or GM Bolt will be costing just $6k and we can start seriously talking about all cars becoming electric. We will have now the entry into the mass market for EVs with the first two electric cars with over 200 miles range and priced under 40k: GM Bolt and Tesla Model 3. Next step we can talk about my magic formula for all cars to become electric 20/200: when $20k buys you BMW 2 series type electric car with 200 miles range.
  Even without this coming lower prices for the electric cars based on mass volume production of lithium batteries we are pushing 1,000,000 sales of EVs this year alone already! Bloomberg provides the new insight into Lithium Battery market and I will have to update a lot of numbers in my Lithium 2.0 Launch, starting with Tesla which now will produce at Gigafactory 1 50 GWh of lithium batteries already in 2018 and 150 GWh by 2022!
  Now you can better understand why the security for lithium supply becomes crucial for the industry leaders. Ganfeng Lithium and Tianqi have made it to the "New Lithium Top 5" this year and even pushed FMC down in the 5th place, according to Joe Lowry. Tianqi controls with Albemarle Talison  Lithium - a source of lithium raw material from hard rock mining in Australia. Now with Tianqi front running for the 23% stake at SQM - a source of lithium raw material from brine in Chile, we will have a new round of competition for the security of lithium supply. Reflecting on its political problems in Chile SQM moves to Argentina in J/V with Lithium Americas and Albemarle has just announced plans for the lithium exploration in Argentina. 
  International Lithium is building the vertically integrated lithium business with $4.5 Billion market cap giant from China Ganfeng Lithium, which is financing J/V operations in Argentina and Ireland. Below you can find more links on the Lithium Battery and raw materials space to make your own conclusions.

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


  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."



  • CATL forecasts $15 billion in sales by 2020 on China’s EV boom
  • Battery maker behind BYD plans first overseas plant in Europe

    Contemporary Amperex Technology Co., China’s second-biggest maker of batteries for electric vehicles, is planning an initial public offering to fund an expansion as the government pushes to boost the sale of plug-in cars.
    The company plans to list on China’s over-the-counter stock market as soon as possible, CATL Marketing Director Neill Yang said in an interview. The maker of lithium-ion batteries will use the funds raised to build new factories, with Yang forecasting as much as a 10-fold increase in sales to 100 billion yuan ($15 billion) by 2020.
    Battery makers are expanding production capacity to support rising sales of plug-in vehicles, as China overtook the U.S. to become the world’s largest EV market with a tripling in deliveries last year. Global demand for vehicle batteries may jump fivefold by 2020 and China probably will account for more than half of global capacity by then, according to estimates by Bank of America Merrill Lynch.
    “The new-energy vehicle market is growing faster than we had expected,” Yang said last week. “We now have plenty of orders to fill because the demand is shifting toward the best companies in the industry.”

    Building Capacity

    CATL had capacity of 2.4 gigawatt-hours last year and plans to as much as triple that this year, Yang said. The company has two plants in China and will start building a third domestic factory soon, he said. Its local customers include BAIC Motor Corp. and Geely Automobile Holdings Ltd.
    The company is preparing to build its first overseas plant in Europe and will pursue business with U.S. carmakers, Yang said. The company’s three European customers include BMW AG, and it’s trying to woo more global automakers, he said.
    CATL was founded in 2011 by TDK Corp.-owned Amperex Technology Co. The company may pass Warren Buffett-backed BYD Co. to become the largest Chinese battery maker in 2018, according to Bank of America Merrill Lynch.
    Other competitors include Wanxiang Group, which bought A123 Systems and Fisker Automotive Inc., and is planning to build an electric vehicle factory in Hangzhou.

    China Factories

    Japanese and Korean companies are also opening China factories. Samsung SDI Co. and LG Chem Ltd. have built plants in Xi’an and Nanjing. Panasonic Corp., the world’s largest EV battery maker and supplier to Tesla Motors Inc., is building a factory in Dalian, targeting production in 2017.
    “With a lot of companies announcing aggressive plans for the battery making business, the competition is getting more and more fierce,” said Zheng Hu, an analyst at Bloomberg New Energy Finance in Beijing. “Eventually, there will be a consolidation in the industry.”
    For now, domestic suppliers benefit from preferential policies to support the industry, while Korean and Japanese battery makers have so far been excluded from receiving Chinese incentives.
    CATL is preparing for the day when the subsidies become negligible, Yang said.
    “What we will do is to make ourselves stronger and compete with foreign manufacturers on a level playing field globally.”

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