Whilst I understand what you are saying, at the end of the day it boils down to total demand and how the Chinese economy transitions (after subsidies to EVs). It is also true in 2018, China accounted for about half the EV sales worldwide. In terms of EV demand, for others I thought I would provide an extract on some various posting I did in another thread overtime, but make it specific to just a a general demand/supply scenario outlook for yourselves here to debate one way or the other.
So here are some basic facts. This might look like a long post but it is not as most is some cut and paste I have done from some previous posts of mine elsewhere:
1. General1. The LCE (Lithium Carbonate Equivalent) kg needs in batteries for passenger vehicles is some 0.9 kg per kWh.
2. For every 1 million new EV passenger vehicles, an equivalent 45,000 tonnes LCE is needed at a installed battery size of 50 kWh assumption (which roughly translates to 45 kg of LCE in each battery).
3. For every 1,000,000 EV's it will need the equivalent, at the mine site, of the addition of a 2 mtpa ore feed facility producing some 340,000 tonnes of 6% grade spodumene (assuming ore grade is 1.26% for example and recovery rate is 80%). Or another way to look at it 2.94 EVs are produced per tonne of 6% grade spodumene concentrate. (Workings below)
2. How much lithium is in a EV batteryNow this is a key question which has a significant impact on projections, and surprisingly there is little literature on the subject.
a.) Battery sizeMy understanding, and as also stated in the article below, that lithium in Tesla EVs constitutes 63kg of LCE for 70 kWh of installed capacity (or 0.9 kg LCE for each 1 kWh of installed capacity). Obviously depending on vehicle (and battery type) can be higher or lower
https://electrek.co/2016/11/01/breakdown-raw-materials-tesla-batteries-possible-bottleneck/In the link below, battery sizes for full electric vehicles differ btw but going through the list you can see some vehicles having battery sizes significantly above 50 kWh and some significantly below that to:
https://en.m.wikipedia.org/wiki/Electric_vehicle_batteryb.) Theoretical lithium content in batteries and actual needsThe theoretical figure is based on the following:1. The atomic weight of lithium is 6.94 grams/mole -https://pubchem.ncbi.nlm.nih.gov/compound/lithium
2. You get one electron per lithium atom, and there are 96485 coulombs per mole of electrons (or what some may refer to as the Faraday unit of charge)
https://en.wikipedia.org/wiki/Faraday_constant
3. Further more you have 3electrons and 3 ions in lithium so becomes 1:1 so probably makes conversions easier
http://resources.schoolscience.co.uk/stfc/14-16/partch3pg2.html
4 One ampere is one coulomb per second.
5. One Amp Hour (Ah) therefore equals 3600 coulomb (60*60)
6. Theoretical lithium content becomes 96485/3600 = 26.80 AH, then divide by 6.94 grams/mole and you get 1 gram lithium = 3.86 Ah (or 0.26 grams lithium = 1 Ah)
7. If your battery has a voltage of 3.6V multiply this by 3.86 Ah and you get 14.282 Watt Hours. See voltage data for batteries here: https://batteryuniversity.com/learn/article/confusion_with_voltages
8. 1000 Watt Hours = 1 kWh so divide 1000/14.282 = 70 g of pure lithium per kWh. If voltage is say 3.2V *3.86Ah = 12.352 and divide this by 1000 and you get 81 g pure lithium per kWh
9. Multiply point 8 outcomes by5.3 - https://www.weare121.com/blog/a-lithium-primer/ - and you get a theoretical 371 grams of LCE per kWh of battery capacity, or0.371 LCE per 1 kWh.
This is a key to understanding the lithium needs in batteries. 0.371 LCE per kWh is therefore a long way from the 0.9 kWh you get by doing the Telsa battery conversion above, and this is where most get confused.
The simple answer for the difference as to why the theoretical lithium content in batteries differs to what you may see is simply that the batteries don't operate at 100% efficiency, and there are a number of reasons why, which are best explained in these links below. Reasons are among others irreversible capacity loss, discharge loss, cycle life capacity fade, etc which has in effect a doubling to tripling effect in the lithium content in the batteries themselves above the theoretical minimum:
http://publications.lib.chalmers.se/records/fulltext/230991/local_230991.pdfhttp://evworld.com/article.cfm?storyid=1826
http://www.meridian-int-res.com/Projects/How_Much_Lithium_Per_Battery.pdf
https://www.linkedin.com/pulse/how-much-lithium-li-ion-vehicle-battery-paul-martin/The last link above provides the following conclusion in italics, which the other articles essentially agree with. It states:
"
The best estimate is around 160 g of Li metal in the battery per kWh of battery,or if you prefer, about 850 g of lithium carbonate equivalent (LCE) in the battery per kWh." A key to future lithium demand is also related to battery size, and if average battery size in EV increases then LCE demand further increases. Alternatively, if lithium battery efficiency moves closer to the theoretical 100% efficiency level then demand reduces so these are the two competing forces going forward in estimating LCE growth for EVs.
3. ForecastsThe following chart is from Bloomberg, but sourced here, and the key is that it provides a total demand profile:
https://seekingalpha.com/article/4289626-look-top-5-lithium-ion-battery-manufacturers-2019
So what does 2000 GWh in 2030 translate to.
Now in producing spodumene if your average recovery rate is 80% then depending on grade of deposit you will need up to 20.3 operations, if average mine equivalent is Li20 is 1%, (16.2 operations if ore feed grades 1.25% Li20), with each operation having the equivalent hard rock equivalent ore feed capacity of 5 mtpa. Obviously far more if the configuration is 2 mtpa ore feed capacity operations.
If your recovery rate is 65%, then your ore feed to produce 1 tonne 6% grade spodumene concentrate equivalent is 23% higher (when compared to 80% recovery rate) which means you now need up to 24.9 operations of equivalent 5mtpa hard rock scale where resource grades hard rock equivalent 1% (20.0 operations at average 1.25% Li20 grade) etc etc etc.
Obviously what I am saying is I doubt the existing hard rock producers plus brine producers are able to scale up so as to prevent new greenfield entrants entering the market by 2030. But that is IMO IMO
This will be more so IMO if solid state batteries enter the market given graphite in the anode of the battery has at least the same amount of kg as lithium needed in lithium ion batteries (which means if lithium replaces the graphite in batteries well you can expect at least a 50% increase in the lithium need in batteries (but I suspect solid state batteries will be in the higher end market should the technology prove successful, meaning NCM and NCA battery technologies for say EVs will continue to be the predominant go in the 2020s IMO).
The other factor that I think the above forecasts are understating is in the energy storage stationary market. I suspect as economics improves for renewable energy, i.e. solar on your roof for example is becoming more attractive, that more households will have access to battery storage technologies so as to store energy from such things as solar panels so it can be used at night etc.
I have also seen higher GWh figures in 2025, whilst others have been slightly lower. Ultimately it is about uptake across the different uses of lithium. But I agree, ultimately, it does boil down to the rate of EV takeup in the passenger vehicle market as that is the biggest contributor to lithium demand.
So yes the Chinese market is important, but there are other emerging important markets as well because growth projections do not solely rely on Chinese growth in the 2020s. And, if we want to talk China EVs there, and the figures been quoted by yourself are passenger vehicles but they are only one component part of their transport strategy in China with EVs there been also in bicycles, scooters, buses etc etc so the picture is a little bit more complicated than what you are seeking to present. IMO obviously.
@sparky96 I am not a holder here either btw but post every now and again. Ultimately it boils down to whether the information provided by
@eugened makes you change your investment strategy. We can debate around which lithium plays are good or not, but I think we can agree that EVs and renewables are not going away and therefore there will be an increasing need for lithium IMO well into the future.
All IMO IMO
(20min delay)