Allkem General Discussion, page-2639

Once again they are trying to push the lithium price down!
A front has formed, consisting of a few banks, which are trying with all their might to push the lithium price down.

Even the experts in the lithium industry, such as Joe Lowry, are slowly getting a thick neck, how they say.

In Morgan Stanley's latest paper, it is assumed that the lithium price will fall by 35% next year.
Morgan Stanley justifies this by saying that the market for EVs in China is already saturated, since China has 20% of the Vehicles are electric.
This is then justified with the decline in sales figures in China.

I am missing essential data on the information from Morgan Stanley. Which vehicle groups are considered purely electric at Morgan Stanley?
Does this also include plug-in and hybrid vehicles? The alleged market saturation may apply to the upper class of the Chinese,
but does this make up the majority of the Chinese? Hardly likely!

Writing about market saturation at 20% is like saying; "We have now mined all the gold in the world!"

With the prices called for EVs, which cannot exactly be regarded as a bargain, many will lack the money to do so,
so that for this reason alone one cannot speak of market saturation. Shortage of lithium remains, but the price is expected to fall in 2023.
It would be the first time in the history of the markets that a shortage of raw material would lead to a price drop!
So there must be a reason why these banks are going against the lithium price.

And in my opinion there is.
This reason is hidden in a line in Morgan Stanley's new paper, which should also be of interest to Goldman Sachs 2% reduction in the gross margin at NIO!"
This fact should not only affect NIO, but also BYD and all vehicle suppliers. Battery manufacturers will absorb part of the rising costs themselves, the rest will be passed on to the customer. Such is the food chain!
Many of the battery manufacturers are to blame themselves, because instead of entering into long-term supply contracts with the lithium producers, they prefer to buy on the spot market.
Did you think that there would soon be an oversupply that was fueled by DLE processes and other pipe dreams and that you would then be able to get your raw materials cheaper?
In addition, an excerpt from the paper by Morgan Stanley: "There are 4 factors that Lithium shortages account for:
1) new/unproven extraction techniques,
2) newcomer/junior miners with limited or no experience,
3) hiccups in adopting lithium supply in new jurisdictions, and
4) pushback/community approval challenges.

"Dem Set against this is an excerpt from a March publication, also by Morgan Stanley:
"Lithium carbonate prices have risen as demand from automakers outstrips supply, underscoring how the energy transition is being slowed by shortages of materials and refining capacity China's leading lithium producers - Ganfeng Lithium Co. and Tianqi Lithium Corp. --reported an increase in preliminary sales for the first two months of the year due to the rally.
Most battery makers in China -- which dominates the lithium-ion battery industry --buy the material on the spot market rather than through long-term contracts, Morgan Stanley said Companies like Contemporary Amperex Technology Co Ltd. however, may be able to get a discount, it said. Despite rising prices, Morgan Stanley is with Tesla Inc. Overweight, with a price target of $1,300 per share, about 30% higher than current levels. There is scope for "profound" long-term changes in the battery industry, and Tesla's size, technology and vertical integration make it best positioned to address the challenges compared to other EV manufacturers."

Every investor can make up his own mind about these statements and contradictions in them.

But before he or she does, one should know the evidence that follows:
With Tesla's target price, however, Morgan Stanley was so off the mark that one can only hope they aren't
too invested in Tesla! Nothing is as old as yesterday's newspaper.

Any act or crime requires a guiding motive.
Now where is this to be found at Morgan Stanley and Goldman Sachs?
It's hidden in one sentence; "An increase of 100,000 yuan in lithium price would result in a 2% decrease in NIO's gross margin!"
Who do you think is invested in this company? Right! Goldman Sachs and Morgan Stanley! In my opinion, profits are at risk here,
due to the lithium prices called and the associated price development that is no longer so strong!
That's why you have to push down the price of raw materials so that NIO can achieve decent or maximum profits again and the "gang" from the
Price development can benefit again to the maximum.

My conclusion :
Don't trust anyone who comes up with illogicality, and certainly not if your own interests are hiding behind it.

Excerpt from Statista:
New record for the number of electric cars - in 2021 there were around 17.4 million electric cars worldwide, more than six million vehicles more than in the previous year.
In view of increasing air pollution and dependence on fossil fuels, alternative drives such as electromobility are playing a role
an increasingly important role in motorized private transport.

China is the leader in registered electric cars
China's EV inventory exceeded eight million vehicles in 2021 - almost four times the number in the US,
who are in second place in the ranking. In China, an electric car quota came into effect in spring 2019,
thereby prohibiting the production of automobile models with high fuel consumption.
The manufacturers are therefore obliged to adhere to a percentage of alternative drives in the production and sale of their vehicles.

Tesla with the highest sales of electric cars
In 2021, Tesla was ahead of BYD, VW and SAIC in terms of sales of electric cars with around 2.32 vehicles sold.

According to the Federal Environment Agency, there are 1.24 billion cars in the world.

Here I can only quote an old Esso advertising slogan:
"There's a lot to do - let's get on with it!"