Some chat on twitter from Simon Moores of BMI and others;
Simon Moores - Today I told Washington DC it needs to build 1TWh of lithium ion battery capacity by 2030. This is 20 Tesla Gigafactories in order to secure its Auto and Energy Storage futures and build a new EV ecosystem.
Jay Roberge - What is the raw material consumption of 20 Tesla giga factories equivalent?
Simon Moores;
- 900k to 1m tonnes of lithium
- 1m to 1.2m tonnes of anode (mainly graphite for lithium-ion batts, but lithium in case of solid state batts)
- 600k tonnes of nickel
- 175k tonnes of cobalt
SF's opinion. The above required tonnes is for US needs only, which I understand has approx 20% of global vehicle sales (all vehicle types). Calculate the numbers on rest of world requirements (i.e. the other 80% of global sales), and you will see there is no hope of meeting that demand, unless many new projects are financed now. If not, well the outlook for existing producers looks extreamly bright, as the future demand will need to be shouldered by current producers and their expansion plans.
There is obviously some game playing atm, as China is not getting its own way, as other countries/regions around the the world move to secure their own supply chains. It's no secret, and the US & EU have made it pretty clear that they want to weaken China's grip and avoid a repeat of the rear-earths debacle, where China has control of supply and thus pricing.
ALB, SQM, Tainqi have already seen that future and are positioning accordingly, and will obviously fight very hard to maintain market share, therefore said games are expected to continue. PLS is still growing its1st, but once it has grown its third, it will be second or third largest producer globally in LCE terms, and thus a mainstay.
It's interesting to note that Simon Moores told the US Senate yesterday, that he's not confident the US will be able to meet the above 1TWh target. He said, I don’t think it’s possible, but the challenge was laid out for the first time in actual numbers. Being a fly on the wall after that comment would have been very interesting, because telling the US they can't, IMO is all the encouragement they need. However and same for the EU, they will be reliant on external sources to meet their needs for a best 3 years, but more likely 5 given the time the build-out and required learning will take.
Where does that leave PLS atm, well for me, with China and South Korea as per offtakes & POSCO JV. However, I get the feeling that bigger fish from other parts of the world (including oz) are running the ruler over PLS, as Tier 1 projects with the scale of PLS are very scarce, and security of supply for ROW is a growing problem.
IMO, big EU and US OEM's will need to venture further upstream to the miners, and as KB puts it, for a measly $500 mill, PLS can more than tripple its output. VW have invested ~$50 bill in the EV and battery supply chain to date, but IMO they are somewhat putting the cart before the horse, they cound easily change that by investing 1% of that $50 bill upstream at the miner to secure that gap in their supply chain.
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