All I can see in this is that Elon and Co. may be attempting to re-ignite this, ”Oversupply” myth in order to down-ramp the lithium sector for his own benefit.
“Mr Baglino added: "There really is enough lithium in Nevada alone to electrify the entire US fleet."
ASX lithium producers slide on Elon Musk’s battery day.
Shares in Australia's lithium producers have taken a hit after Tesla's highly publicised battery day showcase tested investor conviction in the commodity class.
Expectations for the event on Wednesday morning AEST had been seen as the driver of stock forum-fuelled share price momentum among companies with exposure to the electric vehicle (EV) battery supply chain.
Expectations for the event had been set very high, fuelled by Tweets from Musk preparing fans for "insane" developments. AP
And while Tesla's high-profile founder Elon Musk and co-presenter and engineering boss Drew Baglino offered fans a series of materials, process and product targets, investors responded by offloading shares in Australia's lithium producers.
That followed a 7 per cent fall for Tesla shares in after hours trading.
Galaxy Resources plunged 11.6 per cent to $1.29, Orocobre shares dropped 6.5 per cent to $2.60 and Pilbara Minerals gave up 6.8 per cent to close at 34.5¢.
Battery technology company Novonix also fell sharply after reported speculation that it may be revealed as a technology provider to Tesla failed to materialise. Its shares closed 11.6 per cent lower at $1.29.
Lithium producers fell despite shares in other EV-exposed commodity producers gaining ground, weighed down by comments from Mr Musk on resource scarcity.
"It’s important to note that there is a massive amount of lithium on earth.
Lithium is not like oil – there’s a massive amount of it pretty much everywhere," he said, explaining that all US vehicles could be replaced with EVs using lithium sourced in America alone.
Mr Baglino added: "There really is enough lithium in Nevada alone to electrify the entire US fleet."
The presentation offered viewers the opposite take on the outlook for nickel supply, however, with Mr Musk telling the audience that he had personally called the heads of the global miners to discuss supply of the soft metal.
"You know what Elon Musk's profile is like amongst the retail investors – I think it definitely will have an impact [on share prices]," said John Forwood, portfolio manager at the Lowell Resources Fund.
But with battery technology still evolving and solutions varying in the raw materials required, Mr Forwood has taken an alternative focus to gain exposure to the structural tailwind.
"The way we really like to play the electrification theme – all the charging stations, the cars themselves – require a lot more copper. So that's probably the safest bet," he said.
"Rather than trying to pick battery chemistry – is it going to be cobalt, is it going to be titanium, is it going to be tin or zinc or whatever. Every month, there's a new battery chemistry that gets touted."
And while Tesla centred on the abundance of lithium, the market glut that was compounded by the pandemic is expected to be alleviated by the electric vehicles being prioritised in policy responses to the COVID-19 economic crisis from regions including China and Europe.
"I think that's going to be sufficient to help start bringing lithium in particular out of the doldrums," Mr Forwood said, adding that could take a couple of years.
The battery day announcements from Tesla included a plan to halve the per kilowatt hour cost of batteries.
"It’s not a plan that rests on a single innovation – some research project that will never see the light of day," Mr Baglino said.
The showcase included the announcement of a new and larger battery cell and plans to grow Tesla's production capacity.
Reference -
FINANCIAL REVIEW. (23-09-2020) ASX lithium producers slide on Elon Musk’s battery day.
https://www.copyright link/markets/...de-on-elon-musk-s-battery-day-20200923-p55ygh
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