It seems unrealistic to expect a complete shift to electric vehicles by 2030 or even 2035. Demand will be there but supply just doesn't seem possible that quickly; it would require something like a literal order of magnitude increase in supply, which will probably take longer than 8-13 years to manage, unless within 3-8 years the world goes through some sort of almost unimaginable lengths to ramp up exploration and production.
If that extraordinary scenario was to play out, it would be due to utterly extreme demand and thus high prices and we'll all make insane profits. I doubt it's going to be that extreme but if I'm wrong I'll be happy to admit it while surrounded by bikini models on one of my super yachts.
In reality I think we'll take a bit beyond 2035 before there's enough supply for the EU to go fully electric, but to even have targets like they're discussing shows that demand is going to be extreme and we're going to do extremely well.
Given the lack of supply, I think Volvo is smart not to commit to going fully electric within the suggested time frame. This may to some people sound bearish for lithium, but in reality it is bullish, because we know there will be a preference for EVs in Europe over ICE vehicles, but the reality is that lithium won't be in sufficient supply to actually allow production to satisfy demand. Volvo is basing its decision on the conclusion that even that far into the future there will be a supply deficit and people will have no choice but to purchase ICE vehicles because there aren't enough EVs to go around... this indicates long term supply shortage thus long term high prices and I do think they're going significantly higher than we've seen so far.
The bottom line is that Volvo knows almost everyone buying a Volvo as a personal car would prefer an EV, but still plans to produce ICEs because they just won't be able to source enough materials to make the batteries. This move is about lack of supply, not customer or manufacturer preference. Take it from the Swedes over at Volvo, we're going to do very nicely.
QPM Price at posting:
13.0¢ Sentiment: None Disclosure: Held
