Stepford wives, that's a blast from the past MS. Yes, messy when...

Stepford wives, that's a blast from the past MS.

Yes, messy when pricing is too high, stalling and reversing the decline in battery costs, thus impacting EV affordability, which on that last note, we haven't seen demand destruction "yet".

Messy when pricing is too low, stalling and reversing the investment required to bring on new upstream capacity, which led to above high pricing in the last cycle, therefore where is sweet spot, especially considering many upstream projects will sit on the far right of the cost curve, see Standard Lithium Ltd (SLI) DLE DFS announcement from last week, bringing on ~5.5kt LCE in 2026 with capex intensity of US$68k per tonne and AISC just over US$7kpt, ~ double conventional brine extraction costs.

To me the messiest part of the puzzle, is the current M&A activity in lithium mining sector, most of which is coming from the large incumbents, meaning will they sit on those projects, put them on hold and release that supply when convenient, or go down the road of expanding for greater market share, or a bit of both.

Anyways, if one is prepared to look a little bit beyond their nose, the second half of this decade, upstream lithium supply is the weakest link in the supply chain, but Mr/Mrs market only appears to worrying about the now, and its not that we haven't seen/dealt with recessions in the past, they come and go, but probably why the only thing in Oz that has not been impacted by inflationary pressures is lithium wannabes, which leads me back to my above second and first point, in that upstream lithium supply cannot afford another 2 year lull of investment for the sake of the second half of the decade, more importantly the whole energy transition thematic, messy, messy and messy.