The last section of an article about lithium and Patriot Lithium.
Lithium legend Ken Brinsden on Pilbara Minerals, Patriot and why prices can reboundLithium price outlook
As a sign of the ongoing demand for lithium from electric vehicle (EV) makers, Volkswagen signed a binding off-take agreement and invested $CAD69 million in Patriot for around 9.9% of the business last January.
Brinsden says the market is underestimating soaring battery demand and expects hamstrung lithium prices to recover as the cost of electric vehicles, lithium-ion batteries, and solar technologies starts to fall.
He reckons lithium demand can average a 30% compound growth rate over the medium-term as the law of large numbers and exponential growth resets the supply and demand imbalance.
"Battery electric vehicles are getting cheaper mainly through the influence of China but also the effect of hybridisation," he says. "When you buy a classic Japanese or European hybrid it's nominally a petrol engine car with a battery and motor.... the Chinese and others are turning that on it's head - a hybrid is now more likely to be an EV with a tiny petrol motor charging the battery."
This transformation means hybrid EVs such as those produced by Chinese manufacturer BYD are now becoming top sellers in Australia as they offer longer travel ranges and cost less.
"So, I've almost no doubt today that the Western world is underestimating lithium raw material demand growth," says Brinsden.
The entrepreneur also argued a lot of the cheap lithium supply now coming out of Africa is unsustainable as the world accelerates its shift from fossil fuel energy sources. However, other analysts suggest this new supply source will continue to be tapped by China.
Among the brokers, Macquarie rates Patriot's ASX scrip an outperform with a 50 cent 12-month price target, but acknowledges this is likely to be a volatile stock given the fast-changing nature of the energy transition.
https://www.livewiremarkets.com/wires/lithium-legend-ken-brinsden-on-pilbara-minerals-patriot-and-why-prices-can-rebound
