Tuesday, 17 October 2017

Lithium Race: How To Survive Electrification - Is China Prepared To Ban Fossil Fuel Run Cars?

China is not only prepared to ban all fossil fuels powered cars, but it makes it happen now. It is the major geopolitical shift we have seen in our lifetime: the move from the century of Oil to the New Energy. China is moving very fast in the electric space, while here in the West we are still reading about polluting electric cars "which are burning the taxpayers money". New Energy Supply Chains are taken under control one by one by Chinese companies and now electric car makers will be depending on Chinese suppliers at least in the nearest future. The only way out is the direct investments by automakers and battery makers in their own supply chains. We still have to see it happening before it will be too late.

While the Old Empire was fighting wars protecting the Oil blood flowing in the world economy, state-level planning in China has been building the totally new landscape for the economic growth in the Post Carbon Economy. One by one all critical bottlenecks in the new supply chains were taken under control. The ICE Age is over and new players are taking over. This geopolitical tectonic shift after Tesla earthquake is happening very fast, the Tsunami of Electric Cars is coming and lithium is the magic metal at the very heart of this energy rEVolution.

Lithium Race And Energy rEVolution: Reds Are Going Green - Electric Cars Are A Hit With Chinese Consumers.

Wall Street Journal made a very good report on the electric cars rEVolution which is happening today in China. The video report is stressing that all this success is the result of the industrial policy by the government in China. We have The New Energy Plan for the transition to Post Carbon Economy in action in China on a state level. With announcements from GM and Ford embracing electric cars, we have some hope in the West now not to be left in the poisonous DIEsel and Gas ICE Cars dust as well. 

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. Read more.

Lithium Race To Survive The Electrification: "Why China Can Ban Non-Electric Cars And Not California?"

Governor of California Jerry Brown is asking the right question. Is it possible that California can ban non-electric cars? It will be the huge endorsement for its own economy which is home not only to Tesla Motors, but Apple, Google and other tech giants who are looking at the next trillion dollar business to disrupt. Electric cars provide this opportunity, but can it be really done now in the U.S.? 

The answer will determine the speed of geopolitical shift in power balance when China will be leading the world into Post-Carbon Economy. The Old Empire which was built on the basis of a Century of Oil as a source of Energy Domination, military control of ICE Age supply chains and $20 Trillion debt accumulated in order to manage its decline is coming to the end. 

Energy rEVolution will be happening anyway, now it is time to decide who will join it in time to survive this disruption. DIEsel engines will only be the first and not the only victims of this transition now. China is building supply chains for Energy rEVOlution with military discipline. China already controls 75% of lithium supply materials for the batteries driving this Electrification of Transportation and Energy sectors.

For years we are following here Apple iCar, Google and Foxconn among many others working on the different parts of electric cars technology or the new electric cars. Now we are reaching the tipping point: convergence of technology, new players who bring competition and prices down; and anti-pollution movement by the most important countries for the automakers. DIEselGate was the last drop and auto lobby cannot just swipe it under the rug anymore, consumers are not buying "Clean DIEsel". Now automakers will have to change or the newcomers like Tesla or, maybe, even Dyson will start taking their market share from them very fast. Read more.


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