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Short Term Trading Weekend Lounge: 13-15 MAy, page-225

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thunder54

5,578 Posts.

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15/05/16

23:46

Post #: 17773042
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Originally posted by simplygreg ↑

I get the feeling from a few posts that people are assuming everyone in the world will be driving Tesla's by 2022 and its the end of the oil/gas industry etc etc. This is completely false and couldn't be further from the truth.

Yes, Tesla's and lithium batteries will impact the oil industry - but by the smallest amount its not even considerable. There are so many other factors which have a greater impact on the economics of the oil and gas industry.

You have to look at the bigger picture. The orders for news Tesla's was 325,000 vehicles.

There are currently ~1 billion cars on the road and something like 65 million new cars are being built each year. All of which run on petrol.

Just for fractional purposes that number of new Tesla orders is .0325% of the car market.

Oil prices are low (and will probably stay at these levels for some time) but that's simple demand and supply economics.

The shift from oil to gas is a greater factor. Oil is always going to be around and will never be dwarfed by a commodity like lithium.

If so companies like Woodside and BHP who hire the smartest people in the world would be looking to lithium and making acquisitions. They see beyond this bubble of an idea. All these junior lithium runner's will never end up making it to production. I am not saying the larger players (PLS, GMM/GXY, NMT) wont - I am sure they will.

And i'm not arguing lithium and Tesla isn't going to be a big thing. I think its great and they look awesome. But when you look at the fractional percentage of 0.0325% and understand that the developing world who make up most of this globe (and will to the end of our time) wont be able to afford EV's then really the lithium boom in Australia wont last forever. The hype to me has just reached a point which is ridiculous. Look at BGS for example - not a single hole in the ground yet its tripled. CMY - acquired tenements which apparently don't even have lithium and its up 100%.

The supply/demand balance in oil will happen but its always going to be the underlying engine of the global economy and particularly in Western Australia. The importance of Gorgon and these other WA projects is massive for our economy.

People need to step back and realise that lithium isn't the be all and end all. Technology moves at a pace which no one can keep up with. Lithium ion batteries will be replaced with some other form of battery in a few years which is more efficient and technologically advanced. If it was the glory commodity for all renewable energy then why haven't the major companies like BHP, Woodside, Chevron been acquiring these assets while they can. Their analysts look 20-30 years down the line in projections. Clearly they still see the importance of oil in 20-30 years.

Oil and gas will always be there because the developing world will always need it and its the foundation for everything we do. People that make comments that lithium and renewable energies will rid oil and gas are just preposterous.

Maybe in 50 years the fractional shift to electric vehicle cars will be greater than petrol/diesel cars but what I can be sure of is that by that time there will be most likely a newer and better battery made out of another commodity other than lithium.

Expand

There will be a few hundred thousand greenies who will think they are saving the world by buying an electric car, but it will be a fad, for most the additional cost of buying electric and the annoyance of having to charge it will be enough to discourage them from going electric.

Lithium is having it's run, just like all the other commodities do over time it wasn't just a few months ago anything dairy was raging up in value like cows were suddenly an endangered species, let the "experts" show their graphs of lithium supply shortages, they will make nice paper weights with along with the forecasts for copper/iron/nickel and oil of a few years ago, just like then ride the bubble don't fall in love cash out early.

Anyone who truely believes the lithium story is naive, but it doesn't mean you can't make alot of money in the mean time.
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