I'll add to your post 8horse because this is important.
Another article yesterday on the recent supply/demand scare.
http://www.nasdaq.com/article/this-is-why-leading-lithium-stocks-are-tumbling-today-cm905997
"Our forecast had assumed a midcycle lithium price of around $10,000 per metric ton, which is the price we believed necessary to incentivize higher cost supply in order to meet 2025 demand. If SQM ramps up lithium production to 180,000 metric tons by 2025 and the majority of announced projects under development come online, then the incentive price needed for supply to meet our 2025 demand forecast of 775,000 metric tons could fall."
That 775Kt LCE forecast is also a
total unknown. A general rule if one looks at past performance of these research reports is one of
massive under-estimation. Below is the 2016 report by Deutsche Bank predicting 534Kt LCE by 2025. Notice how the current lithium prices are holding steady too instead of their prediction of a fall (184Kt LCE in 2017 compared to about 230Kt in reality)
View attachment 927596
With 230Kt LCE used today, what is needed to get to 775Kt? Well, the difference of 570KT represents
about 8% global EV car sales (assuming 70Kt LCE per 1% increase as per Goldman Sachs study). This ignores all other demand for Li including other transportation like buses, trucks and bikes and static storage etc and the chemical industry which are significant.
So how realistic is 8% + 1% (today) = 9% by 2025?
Well, a Nov 2015 report from Goldman Sachs states 22% of cars using lithium batteries of some sort (8% being EVs/PHEV..rest hybrids) sales by 2025. So even this early estimate is getting there and likely a vast underestimate based on the assumption made in 2015.
Why?
Here is a newer 2017 report from UBS illustrating the reason in reference to the new Model 3 from Tesla.
'We found that the EV powertrain is $4.6k cheaper to produce than we thought and there is more cost reduction potential left. Consumer cost of ownership (TCO) parity vis-à-vis combustion engine (ICE) cars can be reached from 2018 (first in EU), creating an inflection point for demand. We raise our 2025E EV sales by ~50% to 14.2m, or 14% of global car sales.'
http://www.advantagelithium.com/_resources/pdf/UBS-Article.pdf
So UBS thinks 14% because earlier they overestimated the cost of EVs. 14% EV would need more that 775Kt LCE per year.
This is the point. Report after report, when tested years after being written, always under-estimating EV growth.
