...yes, this is what enables EV's to be produced at a much cheaper cost and priced at or close to parity with ICE vehicle equivalents that is a necessary prerequisite for mass adoption and continued growth.
...so lithium price may not be able to go up and stay within a band at current range or slightly higher or lower.
...lithium produced from lower cost jurisdictions in China, South America, Africa serves the Chinese EV battery makers which constitute 70% of global market. The rest of the EV battery makers are Koreans but to be competitive, they would need to source their lithium at comparable costs to what the Chinese are getting too.
...lithium hodlers are fixated in thinking that eventual lower supply (resulting from more miners dropping out) would eventually result in higher lithium price for their ASX lithium players to survive. The way I see it, lower output from current players and projects would be replaced by newer ones owned by the Chinese (in Bolivia as one example) and by the Americans in their own soil (but from 2027 onwards). Aussie lithium players with mines in Australia are in no man's land. They either supply lithium on demand basis to the Chinese at prices they could get from their mines OR they enter into a longer term supply arrangement with the Koreans, as we have seen with LTR and PLS. But I don't see the Koreans long in the present EV battery two-horse race, because the Americans would be the one to emerge as second running to the Chinese in 3-4 years.
...unfortunately our ASX lithium players (with exception of IGO's Greenbushes) will struggle with margins with lithium price stagnation in the next phase of EV growth and when instos market participants finally given up hope of price recovery, their exit will bring lithium stock price valuation even further, probably half from where they are now.
...Trump's victory only further heightened concern over the fate of Aussie lithium, unless of course Australia is prepared to allow the Chinese to take an equity stake in our lithium projects/company, which is unlikely. If we do, our lithium companies can be a part of the global Chinese EV supply chain.
...the best hope for our Aussie lithium producers is to find a large suitor to sell to, and that would represent a major de-risk for the large holders of the stock including their founders. Our Govt can extend them loan to keep them alive but with the Chinese sourcing lithium from their own sources (and there are many) and Americans relying on their own domestic sources on America First policy, it is hard to think that is a compelling decision. On the other hand, if we partner with say Indonesia/India which can convince a Tesla to set up an EV producing plant there for the Asian region, that would be good.
-------------------
The results from @BloombergNEF 's 2024 lithium-ion battery price survey are out. Lithium-ion battery pack prices dropped 20% from 2023 to a record low of $115 per kilowatt-hour. This is the largest decline observed in our survey since 2017.
