The Lithium Boom - An Analysis Of Future Demand Vs. Supply - lithium ion battery price

In this article, I share some of my research models on lithium demand and supply as of 2025.
Readers should understand that this is a work in progress and that the numbers will be adjusted as the actual numbers arrive each year.
In addition, there are some forward-looking estimates to let myself and investors know where we might be heading.
I suggest you build your own model, and then you can look at what you think is the right estimate instead of attacking my estimate and model.
You can also read here about McKinsey's research on the decline in lithium battery prices.
Finally, remember that you need about 5 when you read how much lithium (metal) is in an electric car.
3 times more than LCE to create lithium metal.
That is, 1g lithium metal = 5. 329g LCE.
The price of lithium carbonate equivalent (LCE) in China is at 2016, and the price of LCE in China has risen sharply due to increased demand and shortage of supply.
This resulted in the price of contract lithium rising to about $13,000/ton LCE, which reached $22,000/ton LCE for smaller contract buyers in China.
This is largely due to a doubling in China's supply of lithium batteries in 2015, as sales of electric vehicles (NYSE: EV) surged.
SourceAs practice (in the table below), I took my EV adoption forecast from my last post, "by 2020, EV will be affordable and welcome --
EV portfolio to consider.
"These are all based on an increase of about 50% pa in the electric vehicle market in early 2020, when the price of electric vehicles became very attractive.
Electric vehicle sales worldwide grew by nearly 50% and 2015 in 2014, and 223% in China in 2015.
2016 of world sales grew by 48% and will reach 800,000 this year.
I also rely on some studies by Tony Seba, for example, the cost of lithium batteries has been falling by about 14% pa and is expected to drop by about 16% pa over the next decade.
If you don't believe the price of the battery will drop, then the model will crash, because it seems to me that this is the key to reducing the price of electric vehicles, so the adoption of electric vehicles will be even greater.
You can watch a video of Tony Seba here.
My forecast for the sale price of electric vehicles and the share of the global electric vehicle market as a percentage of all global new cars soldNB: The above figures do not include electric vehicle subsidies.
Each year refers to the end of the calendar year.
As mentioned above, you can make your own model and insert what percentage of market share you think is possible.
ICE is moving in the direction of electric vehicles, with fastFord (NYSE: F) costing $4.
By 2020, 5b will add 13 new electric vehicle models to its 40% vehicle lineup.
My model is only 10% by 2020.
Recently, the president of General Motors (NYSE: GM) wrote: "at GM, we see that the future of ownership of cars and cars is very different from today's.
The vehicle will be electric, connected from
Driving and sharing.
"GM introduced bolts in 2016, with Nissan (OTCPK: NSANY) owning high, Toyota (NYSE: TM), Prius, Mitsubishi (OTCPK: msb
Other electric vehicles include Volkswagen (OTCPK: VLKAY) (Audi/Porsche), BMW (OTCPK: BAMXY), Daimler Benz (OTCPK: DDAIF) Volvo (OTCPK: VOLVY) mazda (OTCPK: MZDAF), Honda (NYSE: HMC), Hyundai (OTC: HYMTF) and Kia (OTC)
Starting from 2025, lithium demand will work from the following assumptions: My lithium demand model 2016-
205nb: 1 ton = 1 thousand tons, ktpa = thousand tons. by comparing with the above forecast, the lithium demand forecast is compared with 2025, goldman Sachs believes that the demand for LCE 470 tons in 2025 (surprisingly based on BEV passing in 2025, only 3%, but Goldman Sachs believes that electric vehicles pass to 25% (previously 22% ), by 2025, it had reached 354 units and Deutsche Bank (NYSE: DB) had reached ktpa in 2025.
I expect major upgrades for GS and DB in the coming years.
I recently noticed this issue (GS only worked 3% BEVs before 2025 ), barry Gerrard also mentioned this in his article, the big bet on lithium power, which he stressed seemed low. I agree.
My forecast sees 2025 LCE demand in all industries of 2,430 thousand tons of EVs 2,830 thousand tons.
Plus the energy storage I didn't include here.
In any case, my forecast for lithium demand in 2025 is 6 to 8 times higher than GS and DB.
The main reason is that I am working on an electric car with 60kWh and the percentage (60%) and number (45 m) of electric car sales is much larger.
If I am too optimistic about the adoption of electric vehicles, then I am too pessimistic about the adoption of energy, and I have not given any LCE requirements in the table above.
The purpose of my doing so is to offset any excessive EV adoption optimism or bias that I may have shown.
In reality, the external card required by LCE is the amount of demand for LCE in the energy storage industry.
This may also be a factor that causes lithium demand to exceed supply.
Most likely the results fall in the middle, but it seems to me that GS and DB analysts are very cautious about the adoption of electric cars and energy storage, using lower kWh EV (maybe 20-
30kWh used in hybrid vehicles ).
Industry of 12 megabytes-
The arrival of the factory and the arrival of many lithium mining projects are not so conservative.
If in fact I am right, LCE suplyi has started a table to see if the lithium miners can meet this additional need. Lithium supply-
Miner's estimate (ktpa LCE) NB: All the figures above are several thousand tons of pa (ktpa ). The above table is an ongoing work that investors need to keep in mind that future production data is just guidance or estimation.
The exercise, however, highlights the following: 2016-2020 -
With enough new projects on the line, lithium demand can be met or exceeded, especially in 2019 --
2020, suppose they go online as planned. 2020-2025 -
Lithium demand (I previously assumed Li-for electric vehicles-
From 2020, the price of ion batteries may exceed the supply.
The most likely outcome here is that juniors (currently around 50 globally) must enter production from 2020 to 2025.
Existing players are also expected to increase production further.
However, some of them will not have the capacity to produce and there will be no restrictions on supply (my life will not support higher products ).
You can read my previous articles on "lithium boom may have just started a bull market for 20 years", "Top 5 lithium miners to consider" and "primary lithium miners"
High risk and high return.
"Risk conclusion investment banks are taking a very cautious approach (Goldman Sachs estimates that there will be only 3% BEVs by 2025 ), their estimate of the adoption of electric vehicles (compared to my 60% BEVs, in my opinion, they did not really consider the adoption of energy storage, so their prediction of lithium demand was too conservative.
I chose a less cautious approach to see what would happen if the electric car really took off quickly in early 2020.
My analysis shows that the adoption rate of electric vehicles has grown steadily and then accelerated in 2020 --
2025, reaching 60% by 2025.
I also think that the battery electric car for the 60kwh battery pack will be the mainstream of electric cars, and as electric cars become cheaper, customers will upgrade from smaller 25kWh hybrid cars to more powerful 60 KW
Tesla (NASDAQ: TSLA) Model 3, BYD (OTCPK: BYDDF) e6 and GM Chevrolet Bolt will be the early big sellers in this market.
In addition to this will ebugs, electric bikes, and etrucks as soon as possible.
In order to keep myself grounded, I have not increased any LCE demand for energy storage, although it may also be huge because we are still in the early stages.
Maybe I will add this later.
If my above assumptions are on track, then it is expected to be as follows: 1) from now until 2020, there will likely be a shortage in the lithium market, but it will be even more serious from 2021 to 2025.
This happened in the early 2016 s and we saw LCE prices in China triple in a few months.
Due to production constraints and some political problems in Chile, the main lithium miners failed to respond quickly.
We can see one.
Operation in 2021
2025, and regularly between the two.
2) the existing lithium miners in production (see the above table) will see strong prices, strong growth in production and sales, and a substantial increase in profits.
In fact, it could be a golden age for lithium miners.
3) the underachievers who enter production may also prosper.
Of course, producers with the lowest cost will be able to withstand any price drop and will be the safest game to play.
If we get strong demand and prices as I expected, then spodumene play, which is on the market quickly, can do a good job as well.
You can read more about the demand/supply prospects for lithium, cobalt and graphite here.
Investors should be aware that this is an activity that involves a lot of speculation about future events.
With this in mind, you should do your own modeling based on the numbers you are familiar.
As an ongoing job, please feel free to let me know if you see any errors on the production numbers.
Any comments are welcome as usual.
Disclosure: I/we are Galaxy Resources (ASX), OROCOBRE (ASX: ORE), long ALBERMARLE (HB );
GXY), piloy minerals (ASX: PLS), NEMASKA Lithium (TSXV: NMX), lithium America (TSX: LAC), ALTURA Mining (as BYD Co. , Ltd. (Hong Kong: 1211) key elements of (TSXV: CRE ):.
This article was written by myself and expressed my views.
I have not received compensation (except for Seeking Alpha ).
I have no business relationship with any stock company mentioned in this article.
Supplementary disclosure: the information in this article is of a general nature and should not be relied upon as a personal financial advice.
Editor's note: This article covers one or more microcap stocks.
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