This from a dundee capital markets report released yesterday... plenty ppl watching Li space!
Tesla Financing and Ontario Gov't Incentives Driving Li Stocks
Lithium sector is again on the rise. This time TSX listed stocks seem to be leading the way. ASX listed stocks had been
performing better up to this point. There are two major drivers this week: Tesla deal and ON Gov’t incentives. Plus the
annual lithium mining conference in NV is next week, which should cause further excitement.
• Ontario Gov’t starting to make EV’s seem real to the average investor. It has set aside almost $300 B in electric vehicle
incentives: $14,000 per car, $1,000 for chargers. The goal is 5% EV penetration by 2020 – and 12% by 2025 – total of 1.7
million cars
• Tesla to raise US$1.4 billion.. This is to fund expansion of its vehicle production to 500,000 by 2018. This is two years
earlier than expected due to incredible demand. At 48 kg LCE per Model 3 – US$480 worth of LCE per car at US$10,000/t
LCE, Tesla would require 24,000 t LCE per year. That’s the equivalent of 15% of total annual LCE supply of 150,000 t. But
LiOH is the required compound. It is a much smaller market at 31,500 t or 21% of total LCE supply according to
SignumBox. Therefore Telsa alone needs ~ 76% world LiOH production per year by 2018.
World Batteries manufacturing is expected to triple by 2020. It’s not just Tesla - brand name companies are building plants
now. Seven are under construction – and 12 expected by 2020 from brand names such as LG, FoxxConn, Boston Power,
Panasonic, BYD, Samsung and others. And we believe that this is just the beginning – expect improved batteries, lower costs,
increased government incentives, more car selection, and increased demand for energy storage applications.
And LCE prices are rising. LCE prices are up ~40% YoY to over $10,000/t, according to Benchmark Mineral Intelligence. LiOH
prices appear to be moving higher and faster. This is moving the stocks. Select brine stocks are up 58% over the past Q. Hard
rock stocks are up 105%, and almost 4.5x over the past year. Brine stock performance may catch up – potentially cheaper to
produce; more brines on TSX.
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