Sort of, they kind of got lucky. Their call was in relation to supply (just as GS state now), but contrary to what is said, demand was the actual problem. The Trump China tarrifs, cuts in China EV rebates and a possible attempt by Chinese companies to take advantage of the situation, saw EV production disappoint. New supply came in online to meet demand, but demand was not there. See graph and consequences below (it's an old one I used).
With recession's predicted, could the same thing happen again? Possibly, but I doubt it. The Osborne effect is in full play, and a fight for market share has begun. In the next 6-12months Tesla will scale very fast. I and so many people I know want to buy an EV, we just can't and it is not just Australia we talking about. Are legacy auto prepared to give their share away without a fight? VW is all in, and others are growing. With what is happening in Europe, they are accelerating the transition. To add to that when mines came online in 2018 the lithium market was very small. A mine like Altura made a big impact. If Altura started production today, it would hardly be noticed.
There is a slight growth reduction in Europe at the moment, but that is completely supply chain issues. E.g. Shanghai shut down, can't ship to Europe. But as Berlin picks up its pace and Shanghai returns, EV sales in Europe will return to trend. VW/BMW/Merc are not going to let share run away from them that easily. It's a fight.
I think in the next few months when Q2 data comes in, things will get back into focus.
AKE Price at posting:
$11.60 Sentiment: Buy Disclosure: Held
