“The New Gasoline”: Electric Car War Sends Lithium Prices Sky High (Oilprice.com)

The following article is republished with permission from Oilprice.com

Note: this is not posted here by way of endorsing the investment advice in the article, but to show how the world is changing in terms of focus when it comes to energy supplies. I would expect if technologies like E-Cat-style LENR comes online, that we could see big changes in the way that electric vehicles are powered, and the quantities of lithium required in EVs would be drastically reduced.

Electric Car War Sends Lithium Prices Sky High

With lithium prices skyrocketing beyond wildest expectations, talk heating up about acquisitions and mergers in this space and a fast-brewing war among electric car rivals, it’s no wonder everyone’s bullish on this golden commodity that promises to become the “new gasoline“.

Moreover, land grabs, rising price predictions, and expectations of a major demand spike are leaping out of the shadows of a pending energy revolution and a new technology-driven resource era.

For once, we have agreement across the board on a commodity: Demand for lithium will continue to rise throughout the year–and beyond–spurred by the rise of battery mega/gigafactories and a burgeoning energy storage business that will change the way we live.

That’s why Goldman Sachs calls lithium the “new gasoline”. It’s also why The Economist calls it “the world’s hottest commodity”, and talks about a “global scramble to secure supplies of lithium by the world’s largest battery producers, and by end-users such as carmakers.”

In fact, as the Economist notes, the price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December—putting it at a whopping $13,000 per ton.

But what you might not know is that this playing field is fast becoming a battlefield that has huge names such as Apple, Google and start-up Faraday Future throwing down for electric car market share and even reportedly gaming to see who can steal the best engineers.

Apple has now come out of the closet with plans for its own electric car by 2019, putting it on a direct collision course with Tesla. And Google, too, is pushing fast into this arena with its self-driving car project through its Alphabet holding company.

Then we have the Faraday Future start-up—backed by Chinese billionaire Jia Yueting–which has charged onto this scene with plans for a new $1-billion factory in Las Vegas, and is hoping to produce its first car next year already.

Ensuring the best engineers for all these rival projects opens up a second front line in the war. They’ve all been at each other’s recruitment throats for months, stealing each other’s prized staff.

And when the wave of megafactories starts pumping out batteries—with the first slated to come online as soon as next year–we could need up to 100,000 tons of new lithium carbonate by 2021. It’s an amount of lithium we just don’t have right now.

The war is definitely on, and lithium prices are the immediate and long-term beneficiary. It all depends on batteries, so it all depends on lithium.

The Lithium Oligopoly Ends Here, In Nevada

This is where the lithium oligopoly ends. It’s where new entrants to the lithium mining game step in to forge a very lucrative future.

Right now, lithium isn’t even traded as a commodity; rather, it is managed through an oligopoly of three or four major global suppliers who have managed supply and demand for decades. That’s why everything is priced on a contract basis.

This year could see that change, which makes it a prime time to get in on lithium.

“The few major suppliers who have so far been responsible for all lithium supply and demand are not going to be able to meet new demand. This is why 2016 will be a very interesting year for anyone with the foresight to see the end of this oligopoly and the potential decoupling of lithium from other commodities,” Dr. Andy Robinson, COO of Pure Energy Minerals (OTMKTS:HMGLF), told Oilprice.com.

Producers are now working quickly to stake their claims and position themselves strategically to become key suppliers.

So far, so good. Pure Energy, for one, is the only player in Nevada that has managed a conditional agreement with a company building the world’s largest battery factory, which is located only four hours from Pure Energy’s proposed mine.

There has been other movement in this space as well–broader, global movement that gives us even more reason to be bullish on lithium.

The fourth quarter of 2015 and the beginning of this year have seen a lot of talk about Australia’s mining giant Rio Tinto considering entering the hot lithium space.

A Major Long-Term Game

This is an energy revolution that is still in its early days, but it’s such a hot commodity right now that chances to get in on the long-term game are narrowing by the day. And Nevada—ground zero in this revolution–is already raking in the benefits because it is the only U.S. state that both produces lithium and holds vast new resource potential.

In 2013 alone, Nevada doubled lithium production capacity, according to the USGS–and that is just the tip of the iceberg given all of the new exploration going on and the fast and furious land-grabbing.

The next wave of battery factories are expected to increase global battery capacity by some 150% by 2020. Within this prediction, electric vehicles will have a projected 20-30% compounded annual growth rate through 2025, so the demand for lithium appears endless.

Some say the lithium market is already at a supply deficit, and the rising prices make new projects even more attractive.

The lithium oligopoly is already a dinosaur, and new lithium projects on highly prospective land forwarded by companies with lower market caps and strong management are what investors will be looking for.

The brine is the place to be, and right now Pure Energy has the only brine resource in North America. It is also directly adjacent to the only producing lithium mine in North America, Albermarle Silver Peak Mine (NYSE:ALB). Lithium sourced from brine, or salty water, is the most cost-effective out there because it is easier and cheaper to extract.

There are billions of reasons to be bullish on lithium, and bullish on Nevada. Goldman Sachs gets it. Not only will lithium feed massive portable energy storage applications, but it will be a “key enabler of the electric car revolution and replace gasoline as the primary source of transportation fuel.”

This commodity that isn’t yet a commodity in trading terms is about to break free from the oligopoly. Get there first.

Article Source: http://oilprice.com/Energy/Energy-General/Electric-Car-War-Sends-Lithium-Prices-Sky-High.html

By James Stafford of Oilprice.com

  • DrD

    Probably the ones who found their batteries becoming “stuffed”, having been misled by all the media hype. Same as the media missinformation about being green and clean.

  • DrD

    Is there proof of that?
    I’m suggesting that the first stage alone of the Coal cycle (coal to steam) is as inefficient as the single stage of the diesel engine. Then add in all the extra coal to compensate for the losses at each of the subsequent (5 or 6?) stages and I see no competition.
    Which is why i suggested some one should present the facts with the full calcalation. In a way that all can see.

  • Pweet

    I missed your reply so sorry for the delay.
    Re: the above, it seems there is a disconnect between what people SAY and then what they actually do. That might be because when the car is new they love it and they say so, but then when the batteries get old, they change their mind. I really don’t know; I only go on the articles I read.
    Take this one for instance, from a site which generally sings the praises of green energy;-
    http://gas2.org/2016/01/09/electric-cars-some-love-em-others-leave-em/
    where it says in part;-
    “… According to a new report from Edmunds.com dated January 4, “Electric vehicles are struggling to maintain loyalty among current owners. According to Edmunds data, only 29 percent of people who traded in an electric-powered vehicle (including pure EVs and plug-in hybrid cars) this year went on to purchase another electric-powered vehicle. Interestingly, about 33 percent of electric-powered trade-ins this year instead went toward a new truck or SUV.”

    I have read many articles saying much the same thing but with varying percentages depending on the area where the survey was done.
    It’s easy enough to find them with google so anyone interested can look them up.
    The 50% loyalty rating that I referred to was around the mid range of the figures quoted. Are they BS? I don’t personally do the surveys so I don’t know, but since there are so many which quote similar figures, I think there must be some truth to them.
    I know there are many articles which say drivers love their electric cars but I will point out the difference between people saying they love their electric car, and the people who actually carry through with this by actually buying a replacement one when the time comes.
    I bought an electric bike. I probably wouldn’t buy another one. It wasn’t used all that much but after 5 years, the battery is pretty much stuffed and a new one costs more than half the price of the bike

  • roseland67

    Articles like these are why people no longer trust or believe the media.
    What a raft of turd

  • Zephir

    The so-called “renewables” and “green-solution” just convert the fossil-fuel crisis into raw source crisis. As this article points out clearly, a shift to renewable energy will just replace one non-renewable resource (fossil fuel) with another (metals and minerals). Right now wind and solar energy meet only about 1 percent of global demand; hydroelectricity meets about 7 percent. For example, to match the power generated by fossil fuels or nuclear power stations, the construction of solar energy farms and wind turbines will gobble up 15 times more concrete, 90 times more aluminum and 50 times more iron, copper and glass. Also, the wind turbines only work when there’s wind, although not too much, and the solar panels only work during the day and then only when it’s not cloudy. Other than that, alternative energy is perfect.

    http://www.nature.com/ngeo/journal/v6/n11/full/ngeo1993.html

  • LilyLover

    There are too many chemistries that can be created if Li skyrockets. Li is important today only because it is the cheapest logical option. If that option becomes costly, we will switch to another option and so on… eventually resulting into the similar price range to that of half the present day price of Li batteries.

    But wit E-Cats and good capacitors, we can live WITHOUT batteries!
    🙂

  • Pweet

    Whether it’s a better way or not, recent surveys have shown “driver loyalty” has now dropped below 50%. That is, more than 50 percent of those people trading in their electric car, trade it in to buy a conventionally powered car.
    It used to be that more people traded in their electric car to buy another electric car, but not any more.
    Most people cite ‘range anxiety’ and the necessity to have two cars in case there is a need to make regular trips in excess of 100 miles.
    Better batteries will go some way to fix this but batteries only live up to their specifications when new. Three years later the owners will again be facing the ‘range anxiety’ problem and that’s when they will be trading in their cars, probably for something else. And there’s the problem.
    They will be trading in their car when they are unhappy with the battery life, so they will probably choose to buy something with a much better battery, or more likely something more conventional.

  • Anon2012_2014

    1) How much lithium per EV.
    2) How many EVs per year.
    3) How much can be recycled from old EVs

    There is no data in this article, just innuendo.

    • Omega Z

      They over play the positives and under play the negatives. A lot of hyperbole here. They expect a 150% increase in EV’s by 2020. In actually numbers, that’s about 1 million cars a year verses the 85/90 million ICE cars built every year.

      There’s a reason you don’t hear much about lithium battery recycling. Where aluminum can recycling is quite simple & mostly mechanically done, Lithium batteries are labor intensive, Basically it’s the reverse process of building them.

      For the record, I was sold on the Electric cars 35 years ago. The issue is that battery technology isn’t economically up to the task. It is my opinion that lithium batteries may never be.

  • Ophelia Rump
    • Zephir

      If yes, why the prices of lithium rises so sharply? These prices are hard number, not just some journal speculations…

  • Frechette

    If the price of lithium sky rockets as the article claims it will present an opportunity for substituting it with sodium.

  • GreenWin

    Good point Christoph. The new Tesla gigafactory will be modular and re-toolable. If for instance Rossi’s X is miniaturized into a ~10kW Combined Heat & Power package it will likely require an external power source (grid or battery.) Since the Tesla plant is designed to build their PowerWall product – they could license or purchase E-Cat X units and value add battery packs. E-Cat X Home – Powered by Tesla. Has a nice ring to it.

  • http://renewable.50webs.com/ Christopher Calder

    I should have said none of the revolutionary new battery and capacitor designs I feel are most likely to succeed use lithium.

  • Brokeeper

    Lithium batteries require electric power to load. Due to its inefficiencies electric car charging will require even more fossel fuel from he utility generation plants verses gasoline, thus increasing its demand and price.

    Once the E-Cat X is abundantly availble in the market both resources will plunge. No more need for huge storage devices in home or automobiles. Hope Tesla sees the vision before over investing in building and production of the Giga factories.

  • http://renewable.50webs.com/ Christopher Calder

    This is a ridiculous article. None of the new battery designs and supercapacitor designs in the pipeline use lithium. The price of lithium will go down. LENR uses lithium, but in such small quantities that market demand will be much smaller than for battery use. The lithium demand bubble has peaked. Also, I think the world can increase supply fairly easily if we find we need more of the stuff.

    • Frechette

      Wasn’t Don Quixote one of the pioneers in the Windmill Tear Down Business? LOL

      • http://renewable.50webs.com/ Christopher Calder

        Baron Munchausen was one of the guys who built them.

      • LilyLover

        Ironically the windmill tearers of today will be hoping to vicariously tear the TPTB!!

  • DrD

    Rhetorical questions:-

    1) Where will the electric come from.
    2) When will some one display the overal efficiency calculation for the entire cycle from eg, oil(etc) – steam – mechanical – electrical- transmission – chemical – electric – mechanical (did I miss one?). Then compare it with so called bad old Diesel, or Petrol.

    No- i’m not defending petrol but the world needs to know the truth about so called good clean electric.

    God speed LENR.

    • Frechette

      Actually such a study has been done. If the electricity is generated from coal which is the case for a large part of the US then electric cars are actually more polluting than the gasoline / diesel variety. In places such as Quebec where most electricity is produced from hydro then electric cars have a distinct advantage over ICE powered vehicles.

  • toast

    Oil investment money looking for a place to land.

    • LilyLover

      By hook or crook, my sincere friends who morally oppose living off of “earned returns on investment” are going to make sure that the oldies’ wealth is skimmed off through 401ks or volatality or perpetual inflation or two-tiered-pricing or good old scams.
      A small parasite, who kills off the bigger parasite is easily forgiven by the society, even if neither is praiseworthy.
      Leeching off of “born rich”, “DoD”, politicians, military/militants, bureaucracy, “actors”, lawyers, bankers, gangs-pharma/agra/oil is a sacred duty of modern Robin-hoods.

  • http://www.facebook.com/100002656573372 Ian Walker
  • Frank Acland

    Note: this is not posted here by way of endorsing the investment advice here, but to show how the world is changing in terms of focus when it comes to energy supplies. I would expect if technologies like E-Cat-style LENR comes online, that we could see big changes in the way that electric vehicles are powered, and the quantities of lithium required in EVs would be drastically reduced.