International Energy Agency: In Order To Limit Temperature Increase Below 2º C The Number Of Electric Cars Needs To Reach 600 Million By 2040.
"The cost of lithium batteries is going down very fast and I believe that fully electric cars will rule the world very soon. Tesla Model 3 with 65 kWh lithium battery provides over 200 miles of range and will become the standard in the industry with its mass volume production from this July. There is around 60 kg of LCE (Lithium Carbonate Equivalent) in one Tesla Model 3 battery. We will need 36 Million Tonnes of LCE to be produced by 2040 to put this IEA plan into life.
To put it into perspective, the total lithium production last year was around 200,000 T of LCE. Now you can better understand why there is the real cut throat competition for the security of lithium supply which is still hidden from the most of the people by the clouds of toxic cancer hazard fumes emitted by all DIEsel cars on our roads. ICE (Internal Combustion Engines) are on the way out, all cars will be electric very soon and we are facing the total disconnect between the coming demand for lithium and the available supply."
And now World Bank is joining the Lithium Race with its own prediction of more than 1,000 % increase in demand for lithium from batteries. Lithium is at the very heart of this Energy rEVolution and this story is finally making its way into the headlines. M&A wave in lithium space has only started this year.
Lithium Race Ludicrous Mode: Chile’s SQM To Acquire 50% Stake In Mt Holland Lithium Project In Western Australia.
The heat wave of Lithium M&A this summer has officially arrived. Lithium race now enters the ludicrous mode and SQM moves into the JV in Western Australia in the hard rock mining! SQM is the world's top lithium brine producer, but recent changes in Chile have brought some new challenges for the company. This move is diversifying SQM geographically and will allow finally increase the share of revenues in its fertilizers and chemicals stream towards lithium products. SQM is already engaged in JV with Lithium Americas and Ganfeng Lithium in the lithium brine project in Argentina.
SQM is itself a target of constant dating from Chinese companies including Ganfeng Lithium and Tianqi. We have just recently discussed the advance from GSR, another Chinese company. Now we can better understand the announcement by Ganfeng Lithium in June when SQM stopped to ship concentrated brine from Chile to China. Please note the announcement that SQM and Kidman have agreed to develop a proposed downstream lithium refinery operation to produce lithium carbonate and hydroxide in WA. All lithium majors are entering into the direct competition now and building their own vertically integrated lithium businesses when the security of lithium supply is everything. This process will drive M&A and consolidation in our industry in this Lithium 2.0 stage.
Bloomberg: The Electric Car Revolution Is Accelerating - Production Of Lithium Will Increase More Than 100-fold.
And now Bloomberg is joining our discussion about critical secure lithium supply to feed this Energy rEVolution and the coming tide of electric cars. The total disconnect between the exponential growth of sales of electric cars and available secure lithium supply is making its way into the mainstream investment media.
For us here, it will not be a secret that BNEF is totally right to point out the main driving force of this coming Electric rEVolution - cheap lithium batteries change everything. The surprise is coming with the news from Audi - they are claiming to be able to purchase lithium batteries for the upcoming electric cars at $114 per KWh from China already! And I will not be surprised by it at all. With all that build up in lithium batteries capacity, the new coming players will bid for business now betting on mass volume production to bring the cost of lithium batteries fast down. We are entering the Solar Panels stage of total industry cost structure disruption for Lithium Batteries with China investing billions to corner this market as well.
Security of lithium supply is at the very base of this state-level investment game by China. In the end, you cannot participate in billions of dollars in available government funding if you cannot secure the supply of lithium raw materials to feed all this pyramid. Disruption of $12 Trillion dollars industries ($4 Trillion Transportation and $8 Trillion Energy and Utilities) is based on the $2 Billion dollars market by sales of lithium raw materials. And the price of that critical commodity is just under 2% of total cost of a lithium battery. We will have the very fast increase in lithium prices and the wave of M&A in our very small sector will be one of the most impressive ones, when billions will be chasing all available secure lithium supply trying to buy the time they have lost already.
Disclosure: I am/we are long ILHMF, TRRXF.