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| The lithium price and Tesla's share price (Source: Bloomberg) |
In this video, via Bloomberg, analysts discuss the impact of EVs on Lithium and Cobalt.
Key points:
- For now there is more than enough lithium and cobalt for batteries
- But by the mid-2020s, there might be a squeeze--lithium production would have to increase by 300%, cobalt production by 127%. It can take from 2 to 15 years for new mines to start producing. However there's a LOT of lithium in Chile.
- Car makers face significant capex to catch up with the new technology, plus we are at the end of an 8 year global upswing in car sales and production. They'll prolly underperform -- except for Tesla.
- Even if price of lithium quadrupled, that would only increase battery prices by 2%
- If cobalt doubled or tripled in price, that would still cause only a less than 10% increase in price
- The prices of other components are plummeting, so the net impact will likely be zero.
