Five years ago, the lithium sector boomed. Some associated...

Five years ago, the lithium sector boomed.​

Some associated stocks went up as much as 8,800%.​

Then they crashed. Today, a new potential lithium boom is stirring. ​

You might think lithium is an old investing story…

The last time investors went crazy for lithium stocks back in 2015, listed Aussie miners like Galaxy Resources Ltd went berserk.

Shares in this lithium producer went from five cents…to more than 50 cents…inside 12 months.

A 10-fold gain…in under a year.

In 2016, the same shares shot up even further — to $4.54.

Investors who rode that wave would have scored gains in excess of 8,800%.
Crazy.

But like all booms, they eventually bust.

From 2017 onwards lithium prices sank…and so too did shares in the Aussie miners digging it up.

You may think that’s the end of the story for lithium…

Not so, as editor Ryan Dinse reveals in his brand-new Money Morning report. Money is starting to flow into lithium stocks once again…

For example, the Global X Lithium ETF - NYSE:LIT — an index that invests in the full lithium cycle, from mining and refining, through to battery production — broke through a key resistance level in early 2020.

While nothing is guaranteed, historically this says the worst is behind for lithium.

Then just consider Tesla for more signs of explosive potential in this sector…

Between October 2019 and early February 2020, Tesla’s share price more than tripled, rising 248%.

That’s thanks to delivery of the first lot of electric vehicles (EVs) from its Shanghai ‘Gigafactory’.

What does Tesla need to make these cars?

Lithium.

And lots of it.

www.moneymorning.com.au


EV battery arms race enters new gear with 115 megafactories, Europe sees most rapid growth

• Benchmark launches Battery Megafactories Europe 2020 Conference, 17-18 June 2020, Berlin, Germany
• Europe’s planned lithium ion cell battery capacity surges in 2019 to 348GWh
• China continues to dominate adding 564GWh by 2028
• Total lithium ion battery capacity in pipeline equals 39m EVs by 2029

The world has entered a new gear in the global battery arms race in new data released by Benchmark Mineral Intelligence.

The number of lithium ion battery megafactories in the pipeline has reached 115, according to Benchmark Minerals’ Lithium ion Battery Megafactory December 2019 Assessment.

This is a significant increase on December 2018’s assessment of 63 electric vehicle (EV) battery plants, colloquially known as Megafactories or Gigafactories (a brand name created by Tesla), in the pipeline.

Europe has surged ahead in planned lithium ion battery capacity for its EV industry in a year which saw global historical highs for pipeline gains to 2029.

Europe’s planned lithium ion battery capacity increase was led by new plants in Germany including CATL in Erfurt, Farasis in Saxony-Anhalt, Northvolt and Volkswagen Group (VW) in Salzgitter, and most recently, Tesla’s Gigafactory 4 in Berlin.

Combined, these battery megafactories increased Germany’s pipeline capacity over the next decade by 432% to 133GWh and Europe’s to 348GWh.

This marked the emergence of a mass EV battery production blueprint being built on the continent.

China remains the battery powerhouse

Despite China’s growth rate being less impressive, the world’s leading EV and battery manufacturer added a huge 564GWh of pipeline capacity in 2019 to a global total of 2068.3GWh or the equivalent of 40m EVs by 2028.

China accounted for 69% of this total capacity while Europe increased its share to 17% yet North America lagged behind at 8%, despite new plants from Korean manufacturer, SK Innovation, Chinese producer, Farasis, and expected expansions at Tesla and LG Chem.

This means China is now home to 88 of 115 lithium ion battery megafactories in the pipeline to 2029, according to Benchmark Minerals’ Lithium ion Battery Megafactory Assessment service.


“There is little doubt that the global trend of 2019 is Europe stepping up its role in the global battery arms race,” Caspar Rawles, Head of Price Assessments at Benchmark Mineral Intelligence explained.


“While China remains the powerhouse, there are major concerns from Europe’s automotive industry over availability of high quality, tier one lithium ion battery cells at a mass scale as a major blocker to EV acceleration,” he added.

The World’s Lithium ion Battery Capacity in 2029​

With Europe now hosting plans for 14 battery megafactories with a cumulative total of 369GWh cell capacity by 2029, Benchmark Mineral Intelligence will launch the continent’s first commercial conference on this specific subject.

“Battery Megafactories Europe 2020 will be the first ever event to specialise in mass scale commercialisation of lithium ion batteries and their supply chains on the continent,” Simon Moores, Managing Director, Benchmark Mineral Intelligence explained.

“Not only is speed and scale of the essence for the European EV revolution to take hold, but quality and sustainability are crucial to every link in the chain, from lithium and cobalt mining through to the battery cell.”

“As we have done in the US, this Benchmark Mineral Intelligence conference will bring the industrial and political communities together to solve the biggest supply chain challenges that we face,” Moores added.

Battery Megafactories Europe 2020 will hear from the major cell manufacturers building capacity on the continent, the consuming automotive OEMs, and every link in the mid-stream from lithium, cobalt, graphite, nickel and manganese through to the cathodes and anodes.

Where will Europe’s Battery Megafactories be located in 2029?​

(Lithium ion battery plants >5GWh/year capacity)

​

Who had the world’s biggest battery plant in 2019 (GWh)?​

It will be a private event for industry participants and government and will not be open to media.
Join us at Battery Megafactories Europe 2020, 17-18 June, Berlin, Germany here:




www.benchmarkminerals.com


LFP & prismatic battery cells at core of Tesla’s China strategy

Tesla

In an interesting development for the lithium ion battery industry, Reuters publicly revealed the use of lithium iron phosphate (LFP) cathode cells in Tesla vehicles made in China.

There were a number of different reactions on the back of the commonly mistaken trend that LFP was on the way out and nickel cobalt manganese (NCM) — especially the 811 chemistry — was here to take its market share.

The reality is more nuanced, especially in China.

What Tesla’s LFP move shows is a China-centric strategy to take market share in the world’s biggest electric vehicle market, but one that is unlikely to be replicated outside of its borders.

Interestingly, it also shows more flexibility from Tesla than many thought.

Benchmark Mineral Intelligence can confirm that the standard range Model 3 made in China, for Chinese consumers, will use new prismatic LFP cells tailored for Tesla by CATL — a first for the electric vehicle (EV) manufacturer which has traditionally used 18650 and 2170 cylindrical cells.

Benchmark is pleased to present its analysis and thoughts on Tesla’s strategy within China:

• Tesla to use LFP cells supplied by CATL for the standard range Model 3s produced within China for the Chinese domestic market.
• CATL’s LFP battery cells are to be prismatic in form but tailored to the Model 3 pack — a first for Tesla, which has traditionally used cylindrical cells.
• Tesla to use NCM 811 cells supplied by LG Chem for its long-range Model 3s produced within China for the domestic market.
• Cobalt has played no part in Tesla’s decision to use LFP cells; the move is a specific strategy to balance the cost reduction of Model 3 with appropriate range and performance for China’s domestic market.
• LFP-powered Model 3s will qualify for China’s EV subsidies as range estimates with Tesla’s drivetrain efficiency will take it beyond the 250km (155 miles) threshold for the minimum subsidy payout of 18,000 CNY (approximately $2,600).
• Benchmark estimates that the total cost saving for Model 3 made in the US using NCA cells will be in excess of 25%.

www.benchmarkminerals.com/membership/lfp-prismatic-cells-at-core-of-teslas-china-strategy/


Tesla Battery Day May Introduce Next-Gen Cobalt Free Non-LFP Cell Hints China

The Tesla Battery Day may introduce the EV automaker's next-gen cobalt-free non-LFP cell, according to one of the company’s official social media accounts in China. The ramifications of Tesla China’s response to a single question may reveal how close the all-electric car maker is to revolutionizing battery cells for all EVs.

Recently, on one of Tesla’s official social media accounts in China, the company’s use of CATL’s cobalt-free battery cells was brought up. One person asked if Tesla China would be using CATL's zero cobalt LFP cells in Giga Shanghai, like the ones used by BYD.

Tesla’s official account replied politely to the inquiry, thanking the person for the question, before dropping a surprising answer. "Thanks for the question. All we can say right now, please stay tuned for the Battery Day in April, cobalt free, not only for LFP,” Tesla China's social media handle wrote.

According to the response, Tesla China would not necessarily be using similar cobalt-free battery cells as BYD and advised everyone to wait until Tesla Battery Day to learn more.

The Tesla account said it couldn’t provide more details, but did go on to say that zero-cobalt batteries don’t necessarily mean LFP cells. The response implied that Tesla's cobalt-free batteries were not equal to CATL's LFP cells.

Tesla’s interest in CATL’s cobalt-free batteries has been one of the biggest news related to Giga Shanghai lately. Benchmark Minerals, an agency that specializes in the prices of lithium ion batteries, EVs, and energy storage chains already discussed the potential savings Tesla could reap from using lithium ion phosphate batteries for the MIC Model 3 Standard Range Plus.

When Reuters broke the news about a no-cobalt battery from CATL, everyone assumed that the source of the trusted media outlet meant the China-based supplier’s LFP batteries.

According to Green Tech Media, CATL makes both NMC and LFP batteries, and of the two, the latter uses zero cobalt.

So, of course, people assumed that Tesla would be using CATL’s LFP batteries when news broke of the company’s interest in the China-based supplier’s “cobalt-free” cells.

Many have speculated and made theories about Tesla’s strategy for its China-made Model 3 SR+ based on the assumption that the EV automaker was planning to use CATL’s prismatic LFP cells. However, these speculations might have been wrong, if Tesla China's recent social media response is accurate.

Everyone assumed LFP batteries cells would be used for a reason since lithium Iron Phosphate cells seem to be the main one used for EVs that are cobalt-free. However, Tesla China appears to be saying otherwise.

If the EV tech company has a cobalt-free battery cell that isn’t LFP, then one of the main conclusions that could be drawn is that Tesla has already made its next-gen battery that uses zero cobalt--and it will be introduced on Battery Day.

• Element Green •
  Not surprising to me. The original intent seemed like it was to develop high energy density batteries without cobalt. The use of CATL's LFP packs is an additional option which can be used for the standard range vehicles for lower cost and possibly longer life. Tesla seems like it has its own battery breakthrough coming soon though. It makes a lot of sense for them to diversify, since they are going to need a huge amount of batteries and between storage and their EV products.
  
  Joe Rader Element Green •
  Exactly. I think an overarching goal of Tesla for it's next-gen batteries is cobalt-free alongside better energy density and cycle life and operating temp range. Tesla has the secret sauce, the spice melange, but they aren't afraid to go with other manufacturer cells for some products as long as that overarching goal of cobalt-free is met. It bypasses the controversy over child labor in the DRC and reduces the cost of the battery pack significantly.
  
  Tony V. Joe Rader •
  The use of prismatic cells would also require a complete rework of Tesla's battery cooling and advanced control electronics. This doesn't make sense. More likely we will see a collaboration with CATL modeled after the collaboration with Panasonic. CATL will use Tesla's chemistry but will be in charge of cell-production.Tesla will put CATL's cylindrical cells inside a pack.
  
  www.tesmanian.com/blogs/tesmanian-blog/tesla-china-cobalt-free-lfp-battery-day
  
  
  
  
  
  
  
  Tesla China Delivery Centres In Full Throttle Amid Surge In MIC Model 3 Demand
  
  
  Tesla China's delivery centers are moving in full throttle as MIC Model 3 demand continues to increase. Giga Shanghai resumed operations earlier this month, following an extended holiday break due to COVID-19. Recent pictures of Tesla China's delivery centers reveal that activities may have already returned to normalcy.
  
  Tesla China has been using the company's official app for home delivery service of the MIC Model 3 made in Giga Shanghai. The decision to push home vehicle deliveries seemed to be partly motivated by a need to protect Tesla's customers from the COVID-19. Prior to Giga Shanghai resuming operations, VP Grace Tao announced that Tesla China would postpone MIC Model 3 deliveries until the COVID-19 outbreak was properly addressed.
  
  By February 10, Giga Shanghai was operational again and Tesla stores reopened their doors by February 17. Tesla China began home delivery services for the MIC Model 3 first, then reopened delivery centers. Now, delivery centers are filled with fully finished Model 3 Standard Range Plus vehicles made in Giga Shanghai.
  
  As pictured in a recent Tesmanian indicate, new MIC Model 3 owners are picking up their Tesla vehicles from the delivery centers and leaving happy. Tesla's delivery centers will be busy for quite some time, as indicated by the strong demand for the locally-made Model 3.
  
  The official website for the EV automaker, tesla.cn, has been quite active since the MIC Model 3's formal delivery event last month—where Elon Musk regaled Giga Shanghai workers with his smooth celebratory dance moves. The traffic for Tesla's Chinese website increased by 100.5% from 980,000 visits in December 2019 to 1,950,000 visits in January 2020 alone.
  
  The rising activity on tesla.cn reveals how much interest there is in the domestically-produced Model 3 in the Chinese market and may hint at the increasing demand for Tesla's most affordable sedan in the country. Indeed, Giga Shanghai and Tesla China have their hands full with MIC Model 3 production, the continued construction of Gigafactory 3, the MIC Model 3 Long Range coming soon, and later, the MIC Model Y.
  Tesla China are doing a brilliant job preventing #COVID19 at the Gigafactory and outside of the Gigafactory — Jay in Shanghai (@JayinShanghai) February 25, 2020
  Then there is also COVID-19, which hasn't been wholly eradicated yet. Tesla China is going above and beyond to keep its customers safe from the virus. It has even taken to cleaning Tesla Superchargers in China to prevent the spread of COVID-19, at least among its customers.
  
  www.tesmanian.com/blogs/tesmanian-blog/tesla-china-delivery-centers-mic-model-3-demand
  
  
  
  Jefferies analysts on Tuesday cut their ratings on Tesla Inc. stock to hold, saying they needed more visibility into the company’s potential profit and its planned “battery day.”
  
  The analysts raised their price target on Tesla TSLA, -5.95% shares to $800 from $600, but lowered their rating from buy as the stock has gained around 60% in the past six weeks.
  
  “We still need valuation to be grounded into some visibility on market size and potential profitability,” they said in the note.
  
  Tesla shares extended their losses to a second session on Tuesday, recently off 4% amid renewed equity-market weakness.
  
  The Jefferies analysts, led by Philippe Houchois, said they continue to view Tesla as “uniquely engaged in a positive sum-game in the EV transition against legacy OEMs facing more severe strategic choices.”
  
  Tesla is expected to highlight its battery capabilities in an analyst day in April. A lot would be riding on that day, the Jefferies analysts said.
  
  “Tesla has demonstrated a durable edge over competitors in energy (density and management) and connectivity and appears to have reviewed competitive technologies in detail in addition to pursuing its own development,” they said.
  
  “Tesla is in a position to grow into a supplier to other OEMs.”
  
  www.marketwatch.com