EV and battery thread, page-52

Over the last decade of following and buying LIT stocks I’ve changed my view on the ‘oversupply’ debate.

I’ve always viewed Lithium as the next Oil. The mantra is “Everyone is going to need more of it” as we transit away from fossil fuels to renewables that require batteries to store power.

I’ve revised this significantly in the light of the current LIT oversupply situation (call it suppressed demand if that suits you).

LIT is not the new Oil.

Oil is a relatively hard to obtain resource and not everyone has it. When oil is refined into fuel for our cars we reduce the available supply immediately. When you ‘use up’ the petrol in your tank and refill you reduce the supply further, and you do this almost weekly. So more Oil needs to be pumped out of the ground. Supply needs to keep up with demand (unless you’re trying to control the price).

Fast forward to a non ICE and all EV future. Lithium is one of the most available substances on earth and everyone seems to have access to it. When you buy an EV the only LIT consumed is the amount that is required to make the battery. You don’t buy a new battery every week to ‘fill your tank’, you just ‘buy’ electricity to fill the battery.

In essence I see LIT demand as synonymous with Battery demand.

Battery life cycles across all sectors (EV and grid supply) will drive LIT demand and who knows what that cycle is likely to be? So I think LIT is going to be VERY cyclical and we nearing the bottom of the first one now.

We have a perfect storm of increased supply worldwide, flat demand and slow stockpile runoff. It’s going to take a lot of moving parts working in synch to get us back to were we were 2 years ago. If it ever does.

Just my thoughts. Not bagging anyone. DYOR etc.