Benign Banter & Price Predictions, page-5171

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randosmit

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19/01/18

14:14

Post #: 30417844
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Originally posted by GCar ↑

Hi MM.
Imo, everyone investing in this space should have some basic "rules' of thumb" to help weed out the rubbish and to help guide their assessments. They serve as a good reality check, especially at times like these when all sorts of conflicting reports are circulated.

For me, it hinges on basic maths and a range of forecasts of EV/battery uptake.
There are so many "experts" shouting from the rooftops, many just regurgitating the hype-of-the-day that is going around.
The foundation of EV growth is based simply on EV penetration and time frames. Get a good grasp of possible, potential and likely EV growth, and bingo you can do the basic maths.
Wow, while I type this, an email comes through from Mining News:

"THE four biggest losers in the ASX 200 this morning were the index’s four lithium producers, following news that SQM could as much as quadruple production."

So what, right? Sounds scary doesn't it?! Quadruple production! Eeekk, panic, sell down!
I showed some simple maths that says this is a non issue, even with conservative EV growth forecasts. If you get aggressive with the forecasts, like say Tony Seba, then any oversupply dreams are exactly that.

Full EV penetration (+100 million vehicles per year) will require somewhere around 5 million tonnes LCE per year. Put a timeframe on that of your choice. 2040? 2050? whatever.
Work backwards and you will see the sheer amount of mines/operations that are required to supply this.
We are talking about the transition of over 1 billion vehicles! That's somewhere around 50 million tonnes LCE getting around in the form of EV batteries... Put your time frame of choice on that and ponder where all that Li is going to come from.
A couple hundred thousand tonnes from SQM per year (say 4 million tonnes over 20 years; let's double it to keep everyone happy: 8 million) puts only a dent in the amount required.

Some very basic maths like this should be at the core of everyone's assessments if they are here for the long term.

It is going to be a wild ride, that is for sure.

IMO and DYOR of course

Expand

Please don't just consider the effect of Cars. Maybe your estimates of EVs also includes trucks.

Bus:
https://cleantechnica.com/2017/11/12/100-electric-bus-fleet-shenzhen-pop-11-9-million-end-2017/

Trucks:
Tesla Semi and all other competitors of different sizes.

Does it also include trains?

How about Boats / Ferrys / Barges / Ships?

https://cleantechnica.com/2018/01/13/dutch-company-introduces-autonomous-electric-barge-europe/
https://qz.com/1039133/the-electric-revolution-is-coming-to-freighters-and-cruise-ships/

Aircraft?
https://www.theguardian.com/world/2...short-haul-flights-to-be-100-electric-by-2040
http://www.iflscience.com/technology/electric-aircraft-future-aviation-or-just-wishful-thinking/

Drones? of all sizes? almost all electric based on Lithium. Don't underestimate drones for package delivery, remote surveillance, and people transport

Have you also considered non-mobile storage?
http://reneweconomy.com.au/tesla-big-battery-officially-switched-on-in-south-australia-55285/
Tesla Powerwall
https://www.nissan.co.uk/experience-nissan/electric-vehicle-leadership/xstorage-by-nissan.html

Also off-grid storage for developing countries...

This is all on top of continued demand for Mobile Phones, Laptops, Tablets, etc.

The advances in battery tech, the falling unit weights, and falling prices, have created industries that didn't exist before.

1 million cars per year new sales, and 1 billion total cars on the road, is still only small when you consider the wider picture.

AGY Price at posting: 41.0¢ Sentiment: Buy Disclosure: Held
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