Lithium carbonate shortages in China have lifted domestic spot prices.
Prices are expected to remain tight until existing producers can increase capacity or new capacity hits the market in 2019-2020.
Overview of the lithium majors, explorers and an ETF. Earlier this month South Korean based LG Chem (OTC:OTC:LGCEY) announced plans to build Europe's largest lithium-ion battery factory in Poland by the end of 2018. The global automotive industry has made numerous product releases providing insight into electric vehicles becoming available by the end of the decade. Recent scandals around emission controls and growing international pressure on the automotive industry to cuts exhaust emissions has assisted to expedite the transition timeline. In recent weeks both Britain and France saidthat new petrol and diesel cars will be banned by 2040, while the Chinese government has also indicated additional support to increase EV production by 2020. Further, decreasing battery prices coupled with increasing global manufacturing capacity has attracted investments into the entire supply chain from lithium exploration to EV manufacturing facilities. Battery prices have decreased from over $1,000 per kWh in 2010, to under $250 per kWh in 2016. During 2017 it has become evident that the electrification of the automotive industry is well under way with a dramatic shift expected to occur by the end of the decade driven by political, environmental and economic factors. Automotive industry has committed to an electric future
LG Chem will invest $1.6 billion in the new factory which will allow the company to produce up to 100,000 EV batteries. Volkswagen Group (OTC:OTCPK:VLKAY) intends to build 3 million EVs a year by 2025 which shows how dramatically the battery supply chain will need to ramp up. It can be expected that LG Chem's recently announced facility will not be the largest in Europe for very long as there is no shortage of automakers looking for secure battery supply. Jaguar, Volkswagen Group, Renault-Nissan and Daimler have all announced plans to build EVs and some will build or expand their own battery manufacturing capacity. Automakers view batteries as a critical component to their success which will draw additional investment throughout the supply chain. Toyota Tsusho (OTCPK:OTCPK:TYHOF), the international trading arm for Toyota Motor (NYSE:TM), under a Joint Venture relationship with Australian-based Orocobre has successfully scaled up their lithium carbonate facility in Northern Argentina. Earlier this year, the Joint Venture announced that they would play a greater role in the global supply chain and have committed to doubling their existing production capacity by 2019 (See: Orocobre's Rapid Expansion Plans In Japan And The Puna Plateau). Toyota's commitment to increasing lithium production was followed on by announcements that lithium batteries for the Prius Prime plug-in hybrid EV would be sourced from Panasonic (OTC:OTCPKCRFY) until at least the end of the decade. The company expects to have market ready solid-state lithium-ion batteries available for integration into their EV lineup by 2022.
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CRFY) until at least the end of the decade. The company expects to have market ready solid-state lithium-ion batteries available for integration into their EV lineup by 2022.
