Lithium Demand Will Grow Faster Than Experts Imagine

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It all started with Tesla’s (TSLA) announcement of its battery giga-factory in February, 2014. That news was discussed endlessly with breathless excitement. The news sparked a revival in lithium, cobalt and graphite juniors. For example, Western Lithium USA Corp. (WLC.TO) based in Nevadamore than doubled that month. At the time, I wrote a few articles saying that the giga-factory was great news for select graphite companies. I didn’t mention lithium or cobalt, simply because I was less fluent in those. Today, I’m better prepared to articulate the lithium story, one of the hotter sectors in the natural resources space. Why now? I think that the lithium-ion battery might be reaching a “tipping point,” the phrase made famous by Malcolm Gladwell. Please note, I don’t use catch phrases loosely, lithium’s spike in demand is no, “black swan” event, and we’re not near “Peak Lithium,” although we could see supply shortages on the horizon. Not only did Tesla’s giga-factory catch everyone’s, the idea caught on so well that there’s already 5-6 announced or in construction giga-factories, (Tesla’s is the largest).

Lithium demand, “is spiking,” for several reasons, again heavily influenced by the $5 billion dollar Tesla facility. Interestingly, the original concept was that the Tesla facility would be completed by 2020. Now conventional wisdom says 2017-18, another bullish data point. Tesla’s fully electric car was way too awesome for its own good. It guaranteed that new competition would enter the space and it has. Get ready for it, an abbreviated list of 15 automakers in the plugin-EV (hybrid) or fully EV market….BMW, Mitsubishi, Toyota, Nissan, Honda, Tesla, GM, Ford, Kia, Fiat, Mercedes, Porsche, Volkswagen, Audi and Hyundai. This list probably doesn’t even contain all of the well known brands. Many of these automakers had no offerings of plugin-EV (hybrid) or fully EVs until after Tesla’s. Here’s another fact, not my opinion, there are dozens of less well known brands diving into the race. China and Europe have plenty of them. China is trying mightily to cut down on air pollution and European cities are small enough to be quite amenable to EVs. Check out this article if you don’t believe me! And, just wait until ALL hybrids become full EVs. A certainty in my mind.

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InvestInFuture 4 years ago Member's comment

Rare Earth Minerals plc (REM:LSE) and Bacanora Minerals (BCN:LSE) will now start to get mentioned more in these articles once more people understand the scale and potential of their Sonora Lithium Project.

After all, they were good enough to tempt Elon to place the first lithium hydroxide deal with them for the Gigafactory this week.

www.wsj.com/.../tesla-secures-lithium-hydroxide-supply-for-its-battery-factory-1440767689

fortune.com/2015/08/28/tesla-lithium-mine-mexico/