The future of Lithium is enormous and Lepidico would be on the radar of many.
Toyota (NYSE: TM) just announced at the Guangzhou Motor Show it will produce its first electric car in China in 2019.
Volkswagen (OTCMkts: VLKAY) also said at the event that it will invest more than $12 billion to produce new-energy vehicles in China.
Ford (NYSE: F), too, said it will invest $754 million in China's EV market, while Honda (NYSE: HMC) announced in September that it would launch a China-specific electric car next year.
Projections show over 350,000 electric vehicles will be sold in China this year. That's more than double the sales in the U.S. last year.
The proliferation of the EV market in China and elsewhere has created a massive increase in the demand for lithium, a key component in the batteries that electric vehicles use to store energy.
Companies that produce lithium are investing billions to expand production. But with such an increase in demand, they simply can't keep up.
Lithium isn't necessarily rare. What's rare are mineral deposits with high enough lithium concentrations to mine economically. And this has led to a shortage of lithium mines.
According to analysts at Sanford C. Bernstein & Co., the world will have to invest somewhere between $350 billion and $750 billion in the global lithium industry in order to keep up with the metal's demand.
As billionaire mining mogul Robert Friedland recently told Musk: “The Germans are building a gigafactory twice as big as yours, the Chinese are building four of them bigger than yours, the Japanese are building two and the Koreans are building one.”
Tesla’s competitors will make this one of the biggest battles of the century — a battle that entirely depends on lithium supply.
Even the firm that Buffett is backing, BYD, has plans for building a gigafactory of its own.
“Imagine 1,000 gigafactories — that’s what we’ll be seeing in the coming decade,” says The Australian Business Review.
Everybody is scrambling to get in on the ground floor.
This is without even considering grid storage, which is set to outstrip electric vehicle demand, and the rising use of consumer electronics.
With lithium about to power every major energy source we need, new energy dynasties will be created...
Global demand for lithium is forecast to triple by 2020!
But the only thing that’s not increasing is supply.
As Simon Moores, head of the minerals and mining consultancy Benchmark Intelligence, says: “I think we will see shortages. New supply is needed now, and it will be in the future, even if a fraction of the planned expansions in battery production happens.”
And BYD is in talks with several lithium producers about potential deals for securing long-term supplies.
So is Musk.
And all this adds up to billions in profits for companies that supply high-grade lithium for batteries.
Lithium is being hailed as the oil of the 21st century.
The recent surge in worldwide demand for electric vehicles has helped trigger a historic bull market for lithium — with prices more than tripling since 2015.
After all, lithium is essential to the batteries that power those electric vehicles and also to the batteries that power many of our most sought-after consumer electronics, including smartphones.
And make no mistake: The world is now in the early stages of a historic shift toward electric vehicles.
Earlier this summer, Volvo announced that beginning in 2019, all of its new models are going to be either a hybrid or an electric vehicle.
Ford CEO Mark Fields wants to convert almost half of the company's fleet to electric vehicles.
Of course, lithium’s applications extend far beyond the automotive industry.
And while demand for lithium continues to increase, worldwide supply is nowhere near enough to the meet growing demand because of how difficult lithium production can be.
Consider this...
Over the next 10 years, demand is expected to continue rising by as much as 16% faster than any other commodity from the past century!
And Goldman Sachs says that for every 1% uptake in electric vehicle use, the increase in battery demand will require 70,000 tons of lithium production a year.
As the Financial Times reports: “Concern is growing among analysts, and some other carmakers, that supply... will not be able to keep pace with demand.”
But here’s the thing...
Bill Gates and His Billion-Dollar Buddies Are “In”
Musk and Buffett are about to face even stiffer competition.
And it's because several members of the billionaire’s club are getting into lithium for a different reason: To get filthy rich.
Like Peter Thiel, billionaire founder of PayPal...
His investment firm injected $15 million in a battery startup with plans to invest $600 million more.
And then there’s Bill Gates, the world’s richest man.
He’s assembled an all-star group of billionaires to invest in lithium-related ventures. This group includes:
Jeff Bezos, founder of Amazon.
Jack Ma, founder of Alibaba.
Richard Branson, founder of Virgin Group.
Hasso Plattner, cofounder of SAP.
Mark Zuckerberg, founder of Facebook.
And more...
They’re putting up $1 billion, to start.
With entrepreneurs of this caliber entering the game, it’s time to sit up and pay very close attention.
The race to secure supply is on. But it’s getting harder and harder to come by. There’s precious little to go around!
LPD Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
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