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Lithium Investing: Toyota Hits Records Hybrid Sales; Increases Position In The Lithium Supply Chain

Apr. 12, 2018 2:06 PM ETAVLIF, LAC, NMKEF, OROCF, SQM, TM, AKE:CA, LAC:CA, NMX:CA12 Comments
Livio Filice profile picture
Livio Filice


  • Toyota has experienced record electric hybrid vehicle sales; released its new energy vehicle strategy until 2030.
  • Company has increased its investment in lithium chemicals company, Orocobre.
  • Advanced lithium exploration and early stage producers are best positioned to benefit from emerging demand.

The lithium industry is off to a red-hot start in 2018 as Sociedad Quimica y Minera, (SQM) the world’s largest producer of the white metal, struck a deal with the Chilean authorities to increase output over the next years. This news was expected for some time and is welcomed as the battery supply chain nervously awaits new lithium supply to come to market in the next year. To have a major, proven supplier announce that it will continue to defend its leadership role is an event that the industry needs to ensure that the new energy vehicle and stationary energy storage market takes flight in the coming years.

The market also received news that Toyota Tsusho will acquire a 15% stake in Orocobre(OTCPK:OROCF)for a total investment of A$282 million, which will allow the companies to significantly increase output at their flagship lithium brine asset, Olaroz. Production at Olaroz will increase from around current production rates of 14,000 T LCE per annum (nameplate 17,500T/year) to 42,500 T LCE starting in 2019-2020. Toyota Tsusho will also take the exclusive marketing rights for all lithium chemicals produced from the expanded facility. Lastly, the Joint Venture is moving to build a lithium hydroxide facility in Japan, using a combination of debt and available government incentives to cover the vast majority of the capital expenditures.

Shift in investment focus to advanced lithium exploration companies

This allows for me to believe that existing 2018 advanced lithium exploration and producers will quickly separate themselves from early stage contenders who will be sure to fall off the global stage. Should this materialize, then valuations for late stage exploration companies, such as Advantage Lithium (OTCQX:AVLIF), Nemaska Lithium (OTC:NMKEF) and Lithium Americas(LAC) amongst others, will appreciate while investment funds will leave highly-speculative, early stage exploration companies. This is

This article was written by

Livio Filice profile picture
Focus: Lithium exploration and extraction, various energy metals, battery technologies, integrated energy storage systems, electrification of transportation and urbanization megatrends, residential and commercial energy storage technologies. Filice is a seasoned investor with experience in various types of investments, including more than fifteen years in small cap and penny stocks. Over the course of his career he has assisted in investor activities for several mid-stage companies, both publicly traded and privately held. Filice offers substantial first-hand experience in the lithium battery supply chain including new technology product introduction strategies.

Analyst’s Disclosure: I am/we are long OROCF, AVLIF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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