"The lithium sector is going to bounce really hard at some stage"
https://www.cnbc.com/2019/02/28/elon-musk-tesla-not-profitable-in-q1.html
The car companies need to become profitable for the lithium market to truly expand or you are just relying on some sort of China social engineering sledge hammer approach, ie not real market mechanisms. Once you stray from real market mechanisms you wade into uncharted territory. Many Li miners wouldn't exist without support of the down stream plays (customers). The day lithium miners can fund themselves without having their hands held by their customers will be they day I invest in them. It's just too uncertain when miners and constumer are tided at the hip as they are because prices become distorted.
Interesting in the above article that some analysts are opposed to Tesla going down what I call the "people's car" (VW beetle) route. They say the $35,000 price tag on the model3 makes the margins on those cars far to skinny and they are also saying the company doesn't have the capacity to scale up production without more capital expenditure.
I think the model3 will make or brake Tesla as a real car company which will have flow on for the broader sector. Sure Tesla, Volvo, BMW ($68k for the i3 in Australia) etc etc can make expensive toys for rich boys and girls but if you want to disrupt the auto industry you need to make cars that can penetrate the market and you have to be able to make them reliable and at a price where your company makes money without subsidies. There seem to be some red flags emerging at Tesla, ie falling staff numbers (not something you would associated with a company that is successfully disrupting markets), high profile talent leaving the company, reliability questions, falling government subsidies, Elon in trouble with SEC, contempt of courts and tweets. The age of tweeting your company to success won't last long. The successs of companies come from the products they sell and the profits they make, ie good capital managment.
I think people invested in these lithium miners sometimes forget that they own a mining company. Seems more like people have bought lottery tickets for the future which despite some people's strong opinions here is still something that no one can actually predict.Esh
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