The electric vehicle market seems poised for another wave of expansion as battery technology improves to efficiency levels never seen before, thanks to innovations being unveiled by the likes of Toshiba.
The EV market has sent lithium companies soaring as projected demand has gone over the top in the last quarter. Another innovation in fast charging battery technology could only mean good things for lithium battery life.
Lithium companies are grappling to keep up with the increased demand including FMC (NYSE: FMC), Albemarle Corporation (NYSE: ALB), Orocobre Ltd. (OTC: OROCF) and QMC Quantum Minerals (TSXV: QMC) (OTC: QMCQF). Dubbed the "new gasoline" for its ability to power EVs and other energy hungry devices, lithium is getting all the attention right now, but this also raises questions about producers' ability to keep up with the staggering growth.
Based the recent breakthroughs, it appears that lithium producers are going to have to up their efforts including Albemarle Corporation (NYSE: ALB), a leader in the space, FMC (NYSE: FMC), a large lithium producer in South America, as well as Nemaska Lithium Inc., the Canadian lithium company with fast growing interests in the James Bay, Quebec region.
Lithium resources are found in salars or salt brine resources in South America, Australia, and China, as well as hard-rock mineral resources in Canada.
Emerging Canadian lithium miner QMC Quantum Minerals (TSXV: QMC) (OTC: QMCQF), has already launched two separate hard rock projects in Manitoba's established lithium areas and is seeing early results from its efforts.
FAST CHARGE LI-ION COULD BE VERY BIG Toshiba recently unveiled a li-ion battery which they claim charges fully in just six minutes, delivering a 200-mile range on a full charge.
This is a big leap from Tesla's current configuration which takes up to an hour to charge fully.
Toshiba's next generation SCiB lithium ion battery replaces the conventional lithium titanium oxide anode with a titanium niobium oxide anode. The new battery maintains the longevity of the previous older configuration, promising a life cycle of 14 years, assuming a full charge and discharge cycle per day.
The new technology will be feeding an already accelerating EV market that is led by Tesla and a host of European and Asian carmakers.
Tesla has taken the EV industry by the scruff of its neck, multiplying not only car production, but also interest in EVs, a wave that other electric car manufacturers have been keen to ride. In the next few years it is expected that Tesla will have put over a million EVs on the road, while European giants Volvo and Volkswagen have made commitments to turn to electric vehicles as their main products in the near future.
In China, the world's largest car market, the EV revolution has well and truly hit top gear, with nearly 500,000 EVs being sold last year alone.
Governments around the world have also been pushing for the EV revolution, with bans on petroleum and diesel cars coming into effect as part of the Paris Climate Agreement to cut emissions.
According to Global X research, global revenue from lithium-ion battery sales is anticipated to post a compound annual growth rate of 43.1% in reaching a projected $36.5 billion by 2020.
BETTER BATTERIES MEAN MORE DEMAND
This expected upturn in EV adoption has implications on the value of battery metals, in particular lithium.
The world's annual EV production is expected to balloon from 1 million today to over 25 million by 2030, which means that the world will need a lot more batteries. Currently there are constraints on lithium mining, which has kept supply relatively low despite an abundance of ore resources.
Despite the solid lithium resources in South America and Australia, new battery technology and demand make it apparent that new mining resources will be a necessity to fill the coming demand for lithium worldwide.
Analysts warn that better battery technology and improvements like Toshiba's will not solve an expected shortfall in lithium.
BATTERY POWERSUPERCYCLE
Lithium mining is capital intensive and mining companies are reluctant to put in capital based on expectations alone. As such, the lithium supply is not expected to meet demand until the price rises to a level that miners feel justifies colossal capital outlays.
This is an economic phenomenon that has been witnessed with many commodities, very recently with copper. These commodity supercycles begin with an underestimation of a commodity's demand, which initially keeps the price low. The delayed mining capacity expansion causes a large spike in the price of the commodity, which entices mining companies to set expand mining operations.
A similar spike seems to be in the offing with lithium, which could see a big need for EV production met. Investment in lithium is therefore a very attractive bet at the moment.
And new technologies that could overcome former barriers, such as fast charging cells, can only mean a faster adoption of what appears to be an inevitable switch to EVs using lithium and similar technologies.
SOURCE USA News Group
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