Tesla brings the spotlight to the Lithium Battery industry and Lithium as strategic commodity. Numerous reports have shown that further rapid production development by Tesla Motors is impossible without the advance in production of Lithium Batteries. Only economy of scale can bring the cost benefits allowing Tesla Model E for electric cars mass market to happen. Tesla Model X roll out was affected as well due to the shortage of Lithium Batteries. Elon Musk replies to the challenge in style with the announcement of the Lithium Battery Gigafactory with still mysterious partners involved and a lot of rumours about the talks with Apple.
Lithium batteries mass production means much lower prices and it will be the new long awaited catalyst for Tesla Motors and Electric Cars market in general. Situation will be even more interesting with serious development of Lithium Power Storage Batteries for Wind and Solar industries. Elon Musk's foundation of Solar City helps to bring this story up to the scale as well.
"The production volume is expected to be at least 30 gigawatt-hours-worth per year. That's more storage than all the lithium battery factories in the world combined produce now."
It means that only Tesla's Gigafactory will take all Lithium supply allocated today to Lithium Batteries and the production of high purity Lithium will have to double. Industry insiders know that Nevada in no way is able to produce even any close amount of Lithium required, so it will be taken from international market.
We are finally reaching the stage we were writing about for years here, when security of Lithium Supply will become the main priority not only the price. Companies like Ganfeng Lithium from China were quietly rumping up its production facilities to meet upcoming Lithium demand and acquiring strategic stakes in Lithium developers like International Lithium with projects in Ireland, Canada and Argentina. ILC.v has waken up recently in the market and we will monitor the developments next week. Junior miners with solid Lithium projects and access to the Capital with strong strategic ties to Lithium industry end-users will be the beneficiaries of this new Bull stage in Lithium market.
Lithium Catalyst: Tesla Should Focus on Battery Production TSLA ILC.v TNR.v LIT RM.v
"Now Tesla's success will put the spotlight on the Lithium Batteries and Lithium Materials industry again. Apple and Tesla are igniting the buzz about Electric Cars again and the real business very quietly acquires the assets with strategic commodities for the electric revolution.
Lithium industry will get another boost with this leap forward and Lithium supply will gain its strategic value. Ganfeng Lithium is already among top world lithium materials producers and its new production facilities will increase Lithium output in China for the battery industry. Company is very active in building its supply chain with Canada based International Lithium with its projects in Ireland, Argentina and Canada."
"Now China again makes the bold move into the electric space and its lithium batteries and lithium materials industry is making very big progress under the radar screens of general investors. We are following here Ganfeng Lithium and International Lithium and they are getting into the interesting development stage of this cycle now with UK promoting electric cars and China coming back in this high stake technology game with the new force."
"China is literally chocking with pollution and electric cars are the obvious solution for urban mobility over there. Lithium developers are out of market favour now, but wait when investors will connect the dots again. Ganfeng Lithium is already the market leader in China in the lithium strategic supply chain and extending its raw material base with International Lithium strategic partnership. Today's news from UK are putting new perspective to International Lithium 10 million J/V development partnership in Ireland with Ganfeng Lithium.
From International Lithium Annual General Meeting:
"Mr. Kirill Klip stated, "We are working to advance our Blackstairs Lithium project early in 2014 under the ten million dollar joint venture with strategic partner Ganfeng Lithium Co. Ltd. ("GFL"). We are also working with GFL on a corporate structure that will enable the companies to move forward on the Mariana lithium-potash brine project in Argentina."
International Lithium: Jiangxi Ganfeng Lithium to Raise $81.5 Mln via Private Placement ILC.v, TNR.v, LIT
"Now Ganfeng Lithium has the capital to advance its development programs with International Lithium. Once the tax loss selling will be over International Lithium should enjoy better market perception with further advance of Lithium properties in Ireland, Argentina and Canada. Ganfeng Lithium production facilities development shows China's appetite for strategic commodities for electric revolution in order to make transportation and personal mobility still possible after recent pollution scare."
Next week is Tesla Gigafactory week. The California automaker has a major announcement planned, and it's all about its intention to build a battery factory so large, the company is pulling out the giga prefix. At some point in the next seven days, we expect to hear where Tesla will build the plant, who it will partner with, how it will pay for it and lots of other details.
The production volume is expected to be at least 30 gigawatt-hours-worth per year.
The Gigafactory will take in the raw materials for lithium batteriesand put out finished packs, not only for the electric vehicles made by Tesla and its automotive customers, but also for massive amounts of renewable energy storage - that's a niche the company plans to begin to occupy sometime early next year with residential-sized products. The production volume is expected to be at least 30 gigawatt-hours-worth per year. That's more storage than all the lithium battery factories in the world combined produce now. Color us impressed.
Now, you might be thinking, "Is it really necessary to go that big at this point in time?" In a word: yes. Tesla CEO Elon Musk has said its upcoming, more-affordable vehicle - widely expected to be called the Model E- will wear a $35,000 price tag and boast a battery big enough to take it 200 miles on a charge. To achieve this, the cost of the cells needs to come down dramatically, and so it's no coincidence that the time frame for the new facility will parallel that of this car. According to Musk, the benefits from the economies of scale will see a cost drop between 30 and 40 percent.
Of course, historically high prices are one of the main reasons why battery storage has not been widely used in the renewable energy sector, so this development could help drive more demand for cleaner, affordable energy, which, in turn, will drive demand for more storage. That's the kind of vicious cycle we like to see.
Musk said the Gigafactory will be "heavily powered" by wind and solar energy.
Speaking of renewables, that is where the Gigafactory will get much of its needed energy. During the call with financial analysts that accompanied the release of its 2013 fourth quarter earnings report, Musk mentioned that the new plant will be "heavily powered" by wind and solar energy, and will also use older Tesla packs for storage. These will help deflect the traditional arguments against wind and solar, that the sun doesn't shine at night and the wind doesn't always blow.
This leads us to the question of where will the Gigafactory will land. It ought to be some place with lots of sun and wind and, perhaps, a state government keen on incentivizing a new and innovative industry. One, perhaps, that hasn't passed laws to discourage the sale of Tesla's car within its borders. The hot new rumor sees that location as somewhere in Nevada. According to the Reno Gazette-Journal, the Silver State is being seriously looked at, and may have recently beat out New Mexico as the preferred building site. It certainly would stand to reason. Not only does it have ample sun for solar energy production, it's also the location of the only brine pool lithium production in the US and is close to the company's California operations.
The financing of the Gigafactory, which has been estimated to cost as much as $2 billion to build, is, as they say, a known unknown. It obviously has to happen, but the specific arrangements remain a mystery. Will new Tesla stock be issued? Or, will a new entity be created by the automaker and its various partners? Certainly it could provide an interesting investment option for those with confidence in Musk's low-carbon vision."
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