' The Road to 20 ', page-336

Thanks. It’s a good read and a good sign for Glencore. My research indicates that meeting cobalt and lithium demand will not be an issue provided all current suppliers continue as expected on a path towards production.

Check out the chart below:


Here we can see that EV sales are looking to increase from around 550k in 2015 to 2.5m in 2021. What I can also see is that this largely driven by the EVs achieving TCO parity to ICE vehicles around that time.

Also check out the incentives many governments are offering to convert to EV, and once parity is achieved there is likely nothing stopping people from converting. Other than maybe charging infrastructure, which in turn will require more batteries.


UBS research: Our recent checks suggest average battery capacity is now 30kWh for passenger
vehicles and 200kWh for commercial vehicles. We assume battery capacity per
pack increases by about 10% per annum until 2020 for both passenger vehicles
and commercial vehicles. As a result, we estimate total battery demand for BEVs
will be around 125-150GWh by 2020, including passenger vehicles and
commercial vehicles. From a supplier standpoint, this implies global capacity should
have grown by 4-5x by then, given we think the current global capacity is around
30GWh.
Is this achievable? Yes, we think so, considering the capacity expansion plans of
major EV battery players and the feasibility of their plans. Global battery makers
are aggressive on expanding their capacity. For example:
 Panasonic currently has an 18% global market share, and is to add the new
Gigafactory with Tesla, which should have 50GWh capacity by 2020, according
to the company.
 We expect LG Chemical to increase its capacity by c5x to c20GWh by 2020.
 We estimate Samsung SDI will increase its capacity for mid/large size batteries
by about 6x from 2015 to 2020, to around 30GWh.
We think global battery capacity can support the growth of BEVs, assuming
capacity expansions proceed on schedule. Are their plans feasible? Yes, we think
so. Battery makers have hitherto spent about $100m for a production line to
manufacture c.1-1.5GWh of batteries per year. For a normal size fab with 3-5
production lines, shells and infrastructures have required additional $200m,
depending on actual sizes. Consequently, we think the global battery industry
would need around $13-18bn to build the required capacity mentioned above,
and we believe this is possible, though we see some potential for capex to be
lower than this, driven by increasing capacity per production line thanks to
technology improvements.

So there you have it, in summary:
- EV sales to increase 5x by 2021 and by 20x by 2025
- Supply to meet demand shouldn’t be a problem provided existing suppliers continue tracking as expected
- TCO parity between ICE and EV estimated to be reached around 2020-21 in EU and China
- Many government are incentivising EV conversion
- EV cost of maintenance will drop below ICE by at least 10-20% plus no emissions

So considers this a very solid move by many governments to achieve their emissions targets signed up to in Paris.

IMO, if you find a solid lithium or cobalt company, with near production capability or solid PFS or BFS and with a solid management team, BUY it and keep buying it as this thing is going sky high.