Essay by Eric Worrall
Lithium prices are down lately, and EV manufacturers, the major users of Lithium, have recently announced substantial cuts to production. So why are Lithium miners so optimistic?
Electric Vehicles Are Stuck In A Lull. What That Means For Tesla, Other EV Stocks And EV Battery Manufacturing.
- APARNA NARAYANAN
- 12:38 PM ET 12/18/2023
The transition from internal combustion engines to electric vehicles was never going to be easy. But the gradual arrival of battery-powered cars drove sprawling plans to make EVs and EV batteries in the U.S., with companies like Tesla (TSLA), Ford Motor (F) and General Motors (GM) leading the charge.
Federal funding combined with geopolitical and climate concerns to expand the promise of industry growth for EV stocks and the so-called battery belt taking shape across the U.S. and beyond. The hope was to strengthen the Achilles’ heel of the nation’s electric vehicles boom: its reliance on batteries and critical minerals from abroad, especially China.
But consumer enthusiasm for electric cars has recently lost some of its charge, with Tesla, Ford, GM and Rivian Automotive (RIVN) among those turning cautious and scaling back, among other things, their battery manufacturing plans. Now analysts and executives are reading the data and the tea leaves, trying to determine whether the vibrant outlook for EVs and battery manufacturing is paused, broken or evolving into something new entirely.
…
“Automakers are losing tens of thousands of dollars for each electric vehicle sold,” said CFRA equity analyst Garrett Nelson. “Something had to give, and it has given.”
…
Read more: https://www.investors.com/news/electric-vehicles-market-loses-charge-what-means-ev-stocks-tesla-ev-battery-buildup/
A cut in EV production is a big deal for Lithium miners, according to the IEA in 2022 around 60% of Lithium production was used for EV batteries.
But Lithium miners are still projecting optimism;
Lithium prices crashed in 2023, but these figures show white gold is still the market’s biggest bet
- Lithium prices have tumbled in 2023, but new data shows the money men continue to bet on the battery metal
- BDO’s Sherif Andrawes says financiers and punters are looking at long term demand for lithium by backing equity and debt raisings in the metal ahead of traditional stayers like gold
- Weak IPO market and falling cash balances should see even more lithium and gold M&A in 2024
As gold prices picked up steam and lithium prices began to crash, the flow of money into ASX explorers ran the opposite direction in a sign investors continue to view lithium as the commodity of the future.
Oversupply in China and the consequences of a small, volatile market have seen spodumene concentrate prices fall to a little over US$1000/t, just 12 months after rising to upwards of US$8000/t in an unprecedented bull run.
Chemical prices have fallen from around US$80,000/t to a little over US$15,000/t in the same time.
The fall has revived memories of the bear market from 2018 to early 2020, when against many industry projections, but inline with the warnings of some investment banks like Morgan Stanley, spodumene prices fell to around US$500/t and only the strong survived.
…
BDO’s head of global natural resources Sherif Andrawes said investors continued to punt on a massive uptick in electric vehicle demand going forward.
“There is a long term view that even despite the short term prices coming down and a lot of volatility in the lithium price, the long term demand for lithium will be there,” he told Stockhead.
…
Read more: https://stockhead.com.au/resources/lithium-prices-crashed-in-2023-but-these-figures-show-white-gold-is-still-the-markets-biggest-bet/?amp
Why are Lithium miners so optimistic?
It might be because they think politicians are still in their corner.
But the politicians have been slow to inflict promised EV mandates on voters, in what promises to be a difficult election cycle for Net Zero aligned politicians – so slow that EV manufacturers are starting to complain.
Ford UK says any delay on government petrol car ban risks EV transition
Reuters
September 20, 20239:30 PM GMT+10 Updated 3 days ago
…
Ford said dropping the [British] 2030 deadline would be a mistake, and hinted it could put further investments at risk.
“The UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future,” Ford UK chair Lisa Brankin said in a statement on Wednesday.
“Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.”
…
Read more: https://www.reuters.com/business/autos-transportation/ford-uk-slams-potential-relaxation-plans-ban-new-petrol-diesel-car-sales-by-2030-2023-09-20/
What can we make of all this?
For starters I don’t think Lithium is going away forever. Even if current generation EVs turn out to be a bust, as seems increasingly likely, there really is no substitute for Lithium when it comes to batteries. The nearest relative to Lithium (atomic weight 7) is Sodium (atomic weight 23). But Sodium on an atom for atom basis is 23 / 7 = 3x heavier than Lithium. So in any application where weight is important, Sodium has a huge disadvantage compared to Lithium.
Having said this there are alternatives to batteries, which might one day supplant Lithium batteries – so there is no absolute guarantee Lithium batteries are the future.
For vehicles, the distress of EV manufacturers is creating an opportunity for hydrogen and ammonia fuel proponents. Even laptops may one day be powered by fuel cells rather than batteries. And there is the ever present possibility of a supercapacitor nanotech breakthrough which could upset everyone’s apple cart.
Frankly I find the green alternatives to EVs scarier than EVs. When an EV catches fire you usually have a chance to get out, a few seconds between smoke and deadly fire. But ammonia can kill you on contact, it chemically attacks and burns any flesh it touches. And hydrogen is horrifyingly explosive and flammable – as residents of Bakersfield discovered in July this year.
As for supercapacitors – anyone who has seen an old style TV fail with a bang has witnessed a small scale capacitor dielectric failure. Imagine that scaled up million times, and you get the idea of why I’m going to let someone else drive the first supercapacitor EVs.
Given I think “green” alternatives to EVs are even worse, am I saying EVs are the future?
The answer, for now at least, is no.
Consumers are clearly voting with their wallets, rejecting EVs, leaving them on the dealer lots. And politicians are caving in to demands from voters to extend the deadline for phasing out gasoline vehicles.
Barring an unexpected range, price and reliability breakthrough, I can’t help thinking the Lithium bulls could be in for a long wait, to realise a return on their investments.
Update (EW): Added a quote from the first article “Automakers are losing tens of thousands of dollars for each electric vehicle sold…”
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Storage of massive amounts of energy, of any type, is a dangerous activity. You don’t want to live downstream of a big dam.
AFAICS, fossil fuels are the safest way to hold and manipulate large amounts of energy.
Never in the field of expert prognostications, have so many predicted so much that was so wrong.
supercapacitors are just electric grenades waiting to detonate … when they go bad they don’t just heat up and burn … they go boom … they will never be a “safe” alternative to batteries …
Please understand that I do not in any way endorse the idea that there is such a thing as anthropogenic climate change, nor do I believe that it is necessary, economic or wise to stop using fossil fuels. But lets just follow along and play the game by the warmunists rules.
I don’t believe that Li, Na, or Unobatinum batteries are any kind of solution to creating a non fossil fuel transportation system.
But, neither are hydrogen nor ammonia.
Hydrogen is just plain nuts for any number of reasons. This is especially true is hydrogen is to be manufactured by electrolysis of water. The efficiency of that process is capped by the fact that one of its products, Oxygen, is not a fuel.
@Eric Worrall provides weighty objections to using ammonia as a transportation fuel. Although, we must still manufacture lots of ammonia to use as a fertilizer or a feedstock. It may also be the case that ammonia is a cheaper and safer way to store and transport hydrogen than either liquefaction or compression.
But, if we have hydrogen and we have carbon, including but not limited to CO2, we can use them to create Methane (CH4), or any number of alkanes (e.g. octane C8H10), alcohols (e.g. Methanol CH3OH), or ethers (e.g. dimethyl ether DME CH3OCH3) any of which are far better fuels than either hydrogen or ammonia.
IANAC*, but I believe that the reactions to create hydrocarbon fuel from H2 and carbon (even CO2) are far more energetically favorable than creating ammonia from H2 and air.
The tricky issue in playing the no fossil fuels game is sourcing the carbon. One source of non FF carbon is anaerobic destructive distillation of organic material such as trash, municipal waste, and agricultural waste. Even the ash produced by such a process maybe a useful source of chemicals (e.g. NaOH, KOH, and Lime) and construction materials. We can even, at some energy cost capture CO2 from air.
*I am not a chemist.
Aparna Narayanan isn’t the smartest person in the false news world.
At present, lithium is a one time use product. When the battery fails to charge or retain a decent level of charge. There are no recycle centers that actually recycle a battery’s final lithium products in that battery.
Which will make the scarce lithium source minerals far far scarcer as the ores are wasted on EV batteries.
Such a belief will ensure that fossil fuel ICE will remain as the only serious energy source for large vehicles.