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Lithium Race: Where All These Batteries For Electric Cars Will Be Coming From?

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Lithium Race: Auto Industry's Ranks of Electric Car Battery Suppliers Narrow.

Information about our industry is slowly sipping in to the investors and people start to connect the dots: Tesla - Batteries - Lithium. A lot of surprises are waiting to be discovered now: first will be that China controls 75% of Battery Grade Lithium Hydroxide. Lithium market is very small and controlled by just few companies. Prices are already rising even before Tesla Gigafactory is coming on-line. Welcome to future, it is here and it is electric. Lithium is the magic metal which is at the very heart of this rEVolution.

Lithium Race In "War On Pollution": Investors Swarming Lithium Battery Market In China.

I continue to map the fast changing landscape for Lithium Battery business. Today we can start to add more Megafactories to the list. Tesla Gigafactory is being chased not only by Warren Buffet with BYD, but other well established players that we have discussed before: LG Chem, Foxconn, Boston Power and A123. Today we can start to dig out 17 new players in lithium battery space. I think that in the end we will have very similar situation to the Solar Panels - lithium batteries will become a commodity and price will drop dramatically. For my personal Holy Grail we need $100 per kWh - it will bring us my magic 20/200: $20k electric car with 200 miles range.

In the end we will have the overcapacity built and consolidation in the lithium battery space, but for now: the more - the better! State-level government policy to build new strategic industry: electric cars, brings its fruits already and new stimulus money which are fighting stock market collapse are sipping in the incredibly high growth lithium space.

The best players will be rising faster with this tide and Ganfeng Lithium is very well positioned for this growth. Ganfeng is building vertically integrated lithium business with International Lithium as strategic partner to develop the secure supply of lithium. Ganfeng newly built facility with 6,000 t/y of Lithium Hydroxide capacity is ready to supply this rapidly growing demand for high purity battery grade lithium. China now controls 75% of Lithium Hydroxide battery grade production facilities in the world. Prices are already going up even before all these Gigafactories will be coming on-line. Joe Lowry will be your best guide into the building shortages in the lithium market and a lot of broken dreams and promises in this industry. He forecasts the dramatic 150% rise in Lithium Demand over next 10 years and Apple Electric iCar is not even accounted for!
Ganfeng has bought a small Chinese mobile lithium battery maker last year and has secured 10% stake in revamped Boston Power, which is building its own Megafactory in China now. Check out our latest news from both J/V projects of International Lithium financed by Ganfeng in Argentina and Ireland.

"War on Pollution" and state-level plan are driving this incredible advance in technological leap into post carbon world by China now. Leapfrog into EV space mass production is happening already. Not a lot of people realise that Warren Buffet is one of the major players now in China with his BYD investment and Elon Musk talks Tesla production in China while building Superchargers Network. It will charge the mass market with Tesla Model 3 rolling out in 2018. Apple iCar will change our landscape overnight and connection with Foxconn can be a very interesting twist to the whole story. Ganfeng Lithium already supplies LG Chem, BYD, Boston Power and Panasonic which supplies cells to Tesla Motors and investing in Tesla Gigafactory. International Lithium new aggressive stage of development will bring us closer to potential production for this well established top lithium materials producer in the world.

The Lithium-Ion Battery Megafactories Are Coming: Production To More Than Triple by 2020.

International Lithium Corp. Reports on Continuing Work in Argentina and Ireland With Ganfeng Lithium.

Mr. Kirill Klip, President, International Lithium Corp. comments, "Our projects are advancing in tandem with rising lithium prices. The lithium supply chain is being stressed even before the commissioning of the Tesla Gigafactory and other megafactories from BYD, Foxconn, Boston Power and LG Chem. Our joint ventures with Ganfeng Lithium demonstrate that cooperation between companies with varying expertise in the raw materials supply chain can work to secure a supply of strategic commodities. In this case, lithium which is necessary for the clean energy initiatives announced by the U.S. and China. These two countries alone will provide mass markets for electric cars and home energy storage units increasing the demand for lithium batteries."

The Wall Street Journal:

Auto Industry's Ranks of Electric-Car Battery Suppliers Narrow

THREE BIG ASIAN MAKERS EMERGE AS FAVOURITE SUPPLIERS AMID TURN FROM IN-HOUSE AND STARTUPS

By
MIKE RAMSEY

August 20, 2015
Luxury car maker Audi AG on Wednesday revealed its first all-electric car would go 310 miles on a charge using an advanced battery developed by South Korea's LG Chem Ltd. and Samsung SDI Co., two of three Asian suppliers increasingly favored by car makers.

Failed technology gambles and a half-decade of jockeying among suppliers have top auto makers increasingly choosing LG, Samsung SDI and Panasonic Corp. The three are emerging as the early winners amid a shift by car companies away from in-house efforts, traditional battery makers and startup ventures.

Their quick rise as key suppliers to European, Asian and U.S. car makers is remarkable for an industry that typically insists on reducing risks by building key components such as engines in-house-or using lots of suppliers for less-critical parts.

In part, experts say few companies so far have shown they can meet the challenge of building advanced batteries with the quality, weight and cost expectations that auto makers demand. And the technology is moving so fast that few auto makers have tried to master the exotic chemistry required.

Of course, electric cars remain a niche market amid a lack of charging and other infrastructure, high development costs and low gas prices. But coming exhaust emissions regulations have encouraged Audi and others to bring all-electric vehicles to market. And they largely are picking the same three Asian companies to supply batteries.

This week, Boston-based emerging technology researcher Lux Research Inc. forecast the market for electric-vehicle batteries will grow to $30 billion by 2020, from $5 billion this year, and predicted the three suppliers will split most of that pie.

"If we look out in a five-year time frame, we are looking at Panasonic, LG and Samsung SDI making up about 80% of the market" said Cosmin Laslau, a battery expert with Lux Research.

Companies that once vied for electric-vehicle contracts, including Johnson Controls Inc. and A123 Systems LLC, changed course after losing out to the larger rivals. They now supply smaller batteries for hybrid cars that combine battery power with an internal combustion engine.

Japan's NEC Corp. remains the No. 2 battery provider for electric-vehicles from its contract supplying Nissan Motor Co.'s Leaf car. That contract appears to be at risk based on recent statements by Nissan Chief Executive Carlos Ghosn, who indicated the next-generation Leaf could use LG batteries.

"We have opened to competition our battery business in order to make sure we have the best batteries," Mr. Ghosn said in a recent interview. "For the moment, we consider that the best battery maker is LG."

An NEC spokesman declined to comment about the contract.

Panasonic is the top battery maker, supplying Tesla Motors Inc.,Volkswagen AG and Ford Motor Co. It supplied 38% of the electric vehicle batteries over the past 12 months, according to Lux and likely will continue to grow if Tesla's sales go higher.

Tesla, aiming to sell at least 50,000 vehicles this year and 500,000 annually by 2020, is building a battery plant with Panasonic in Nevada.

LG Chem, however, is surging as it has notched contracts with several car companies and could overtake Panasonic by 2020 if it wins the Leaf deal and Tesla falls short of its sales goals.

LG, holding 11% of the market, counts General Motors Co., RenaultSA, Volvo Car Corp., Daimler AG and VW as customers. Some of those companies also use smaller LG batteries for plug-in hybrids, and soon will move to more capable versions.

GM currently relies on LG for batteries powering the Chevrolet Volt, which achieves 50 miles of driving on a charge. The Chevrolet Bolt, due in 2017, will be capable of going 200 miles on a charge using a LG battery.

Lux Researcher's Mr. Laslau said the shrinking and common supply base could stifle innovation, forcing smaller companies to attempt more exotic chemistries to compete.

"The effect will likely be to force the smaller innovators that much further to the bleeding edge of next-generation batteries, since disruptive technology will be their real shot at overcoming the incumbents' scale advantage," he said.

Unlike most of its competitors, LG is a materials and chemical supplier, not an electronics company. Its ability to craft very specific chemistry for different applications and cells with low failure rates has made it popular with auto makers.

Larry Nitz, vice president of transmissions and electrification at GM, said a study of Volt customers using LG batteries showed almost no loss of range performance after nearly three years of ownership

"We've seen what I would call pharmaceutical levels of quality in cell production. Of the more than 20 million cells that have been produced for the first generation Chevrolet Volt we've seen less than two problems per million cells produced," he said.

Panasonic has said it also has high quality batteries from its long experience as a battery supplier with a broad range of capabilities and customers.

Corrections & Amplifications

Samsung SDI, which is 19% owned by Samsung Electronics, is sharing a contract to supply Audi with advanced batteries. An earlier version of this article omitted it as an Audi supplier and incorrectly described it as a unit of Samsung Electronics.

Write to Mike Ramsey at michael.ramsey@wsj.com"

Disclosure: I am/we are long ILHMF, TRRXF.