Friday 4 August 2017

Lithium Race From DIEselGate And Battery Boom: Germany To Take On Tesla With Another "Gigafactory Rival".

We all are very excited that the UK will ban sales of any new petrol and DIEsel cars from 2040. The ugly truth is that all those millions of illegal cancer hazard polluting cars will be straying on our streets and can be even sold until that time. But nothing is hopeless and people have started to realise the magnitude of "Clean DIEsel" disaster and all associated health risks. Go and try to sell your DIEsel car today - prices are plummeting already. Technology will bring the end of DIEsel and petrol cars much faster than a lot of people think. Now automakers in Germany are getting the message and jumping into electric cars.

Lithium battery Megafactories are mushrooming all around the world. At the moment, they are located mostly in China. Bloomberg is talking now about battery boom. Global battery capacity is set to double by 2021 from just over 100 GWh in 2016 to 278 GWh by 2021. This number can be even higher. Elon Musk has already upgraded his production targets at Gigafcatory from 35 GWh to 50 GWh and now he is talking about 100 GWh from 2022. 

This another "Tesla rival" in Germany will produce only 34 GWh by 2020. Speaking about Tesla Model 3 types electric cars with at least 60 kWh lithium batteries it will be translated into 567,000 EVs per year. This is a drop in the bucket if we compare this number with all those millions of cars produced annually in Germany. More lithium battery Megafactories will be coming. The breaking news came a few months ago that Audi is buying its lithium batteries at $114 per kWh from China. With a mass volume production of lithium batteries, we are getting closer to the Holy Grail for electric cars: lithium batteries priced at $100 per kWH. Electric cars will become better and cheaper than any comparable proposition with DIEsel or even petrol engine. This Switch will be happening very soon with millions of people buying electric cars.

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."


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