Ann: Wolfsberg Lithium Project Update, page-73

High Voltage: Lithium, nickel outlook strong as Tesla smashes production forecasts

While the outlook for commodities like iron ore has deteriorated – and is expected to deteriorate further – UBS analysts say demand for battery facing commodities like lithium and nickel will stay buoyant.This downturn in commodity prices was triggered by Evergrande’s financial issues and the subsequent slowdown in China property sales, plus power shortages in China which has slowed industrial activity materially since July.

The macro backdrop for commodities has also weakened with inflationary pressures pushing central banks closer to policy normalisation/rate hikes, UBS writes.“In our view this is not the backdrop for a sharp recovery in commodity prices; we expect prices fall further over the next 12mths,” it says.“Whilst the recent pullback may have unearthed long-term value in certain stocks, in our view it is too early to buy the miners.“We remain underweight the mining sector with predominantly Sell or Neutral ratings across UBS global mining coverage.”But those stocks with exposure to thermal coal, nickel, lithium, and aluminium will have a better time of it.“Our ‘preferred’ commodities are likely to be more resilient (i.e., go down less/stay elevated for longer than expected) rather than offering upside vs spot,” UBS writes.“Nickel and lithium will be supported by strong EV related demand medium-term.”

Tesla deliveries up 64% on Q3 2020
And speaking of EV demand, Tesla has produced ~238,000 vehicles and delivered +240,000 vehicles in the third quarter of 2021.That’s a big jump on the prior corresponding period.In the 2020 third quarter, the company produced 145,036 vehicles and sold 139,300.“Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct,” the company said October 2.
Final numbers could vary by up to 0.5% or more.Analysts Daniel Ives and John Katsingris of Wedbush Securities said Tesla’s production was roughly 10,000 more than their estimates.“Taking a step back, with the chip shortage a major overhang on the auto space and logistical issues globally, these delivery numbers were ‘eye popping’ and speaks to an EV demand trajectory that looks quite robust for Tesla heading into 4Q and 2022,” Ives and Katsingris said.

Volvo announces $4bn IPO to accelerate EV transitionThe Swedish luxury car maker — owned by China’s Geely – want to raise ~SEK 25 billion ($4 billion Aussie) to “accelerate our transformation strategy towards full electrification”.The fast-growing company — which has gone from selling 373,525 cars in 2010 to more than 770,000 last year — aims to sell only fully electric cars by 2030.

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