Lithium & The Future, page-23

Where Lithium is Going?

Perhaps one of the most difficult research questions is where is Lithium headed.
There appears little doubt that clean energy will be a disruptive technology.
What will be the deciding factors of how Lithium figures in the mix?

So what makes a good rechargeable battery and subsequently increases usage?

Cost of Acquiring
Cost of Replacement
Density
Number of Cycles
Capacity Loss
Optimum Operating Temperature
Safe Operating Temperature
Calorific Value
Recharge Time
Recharge Practicality
Recharge Cost
Weight
Physical Size
Application Acceptance
Recycle Possibilities
and so on....


The above basics will determine where lithium is going and how big the future will be.
Tesla received a lot of press attention with their power wall but the reality may actually be more novelty.

To really understand the future of Lithium would require huge amounts of research and research that goes into every aspect of battery development. It would then require revisiting the whole research paper every year because such is the pace of change.

Lithium usage is a mixture of reality and hype. I think the most important factor for Lithium investment is where will the volumes come from. We can be sure there will be a lot more Lithium coming on stream in coming years. How that new supply correlates with demand will be the key to investment in the long term because it will obviously be the direct driver of profits and ultimately share price.

Lithium supply verses Lithium demand is the key factor. Unfortunately it's very difficult to calculate demand because it's almost entirely driven by technology advances and we are early in the development even though research goes back to early roots some 50 years ago. One thing of which I'm certain is that the EV will drive the real demand for Lithium. Then ask yourself why normal car batteries are not running Li-ion batteries if they are so good for cars. Fact is we only need one and manufacturers want an 8 year life span with high levels of reliability and at a reasonable cost. We are not there yet.

So when investing in Lithium you have to decide what kind of investor you are.

Short term (1 to 3 years)
You are likely to have a blast. The hype is so great that if you pick the best Lithium mines in Australia you almost can't fail. There are announcements on a continual bases from car makers, (recently Porsche and Audi) that feed the hype. However consider that changing batteries is going to be around the cost of a new motor and Porsche motors are not cheap. They are out there because the fact is that Tesla is a luxury vehicle out of the reach of most both in initial costs and on going costs....but no-one wants to be left behind.

Long Term (3 to 20 years)
Here you are playing with the big winners or possibly losers.
Once the reality takes over from hype it's going to come down to technological advances. Not just in Lithium, but solar, wind and others.
it may well be that the humble electric scooter has more impact than a Tesla. One thing I am certain of is that Lithium has an amazing future in the 1-3 year range and that figure is going to be constantly shifting up or down based upon the realities.

For me, I pick one specialized area and immerse myself into it. I then have an investing base for perhaps decades to come that can be attacked with confidence. That requires a lot of initial research. The technology is important to understand the future of Lithium. I would never invest in the technology because it will change like the wind. I think it's a case of strap yourself in and enjoy the ride. Enjoy the hype but be mindful of the reality.

Footnote: At this point I have come to two conclusions.
Lithium has a lot more potential in relation to operating efficiency and we are quite early in the development phase.
The EV will drive Lithium success in the foreseeable future.