Justy, maybe you should extend your time line to reap the...

Justy, maybe you should extend your time line to reap the rewards

High Voltage: In 2023, there’s only enough battery grade lithium for VW and Tesla
Mining
8 hours ago | Reuben Adams


Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.

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Unexpected EV subsidy changes, vague model launch dates, as well as macro events like trade wars makes forecasting lithium supply and demand a difficult task, writes battery metals researcher and corporate advisor Rodney Hooper.
But Hooper is clear on this – in 2023 there will only be enough battery quality lithium available to meet the equivalent of Tesla’s (1.32 million) and VW’s (1.9 million) EV sales targets.
There will be no lithium chemical supply remaining for anyone else, Hooper says, which is a problem because we know that carmakers will be rolling out about 400 to 500 EV models globally by 2023.
This shortfall will be a paticular problem for European original equipment manufacturers (OEMs), who are staring down the barrel of some pretty hectic C02 liabilities if they don’t go EV by ~2021.
In an environment where low lithium prices are prompting chemical convertors to postpone production increases, Hooper says battery manufacturers and car makers are shooting themselves in the collective foot for short term gain.
“OEMs continue to push for lower battery cell and pack prices to make EV sales profitable,” he writes.
“This is understandable given the high capital costs associated with a shift in production platforms from ICE [internal combustion engines] to EVs.
“Scale is central to the ‘learning curve’ and lower battery costs; however, whilst raw material cost containment also plays a role, lithium is the ‘irreplaceable element’ of a Li-ion battery and if OEMs are hoping to pay $10,000/t instead of $12,000/t, thereby saving ~$1.70 per kWh they may pay a higher price in the future in the form of CO2 emission penalties and higher lithium prices.”