CATL, Tesla Squeeze, and Really, Chile?!

June 12, 2018

The past week was another busy one in the lithium space. But a few stories stuck out to us given their impact on the sector, which we discuss below.

CATL comes out guns blazing: Chinese battery producer CATL officially had their IPO this week and was off to a great start.  While that alone would be reason for EV and Lithium investors to be bullish, CATL didn’t settle there.  EV start up Byton announced on Monday that CATL is a “sizable investor” in their $500m Series B round of funding.  This doesn’t surprise The Lithium Spot’s readers one bit as we’ve harped on the fact that companies along the supply chain are looking to make deals and invest in projects to gear up for the coming EV push in the mid to late 2020s.  And with other highly anticipated listings like FMC and Ganfeng Lithium expected this year, we look forward to seeing what deals they have up their sleeves!

Mass market EVs: Inside EVs put out a piece profiling BMW’s i4 concept, which is a beautiful new all electric vehicle with an expected range of 373 miles.  It promises to be the first mass-market vehicle from BMW. While we are unsure what the final product will look like, the concept goes a long way in demonstrating that the other autos are catching up to Tesla in form and function.

Speaking of Tesla: they had their annual shareholder meeting last week in which Elon Musk mentioned the potential of reaching a model 3 production run rate of 5,000 per week by the end of the month.  Since the meeting, the company has had a rapid short squeeze, with the stock up over 20%! We took a look at the key points from the meeting and what it meant for the lithium sector, including Tesla’s new deal with Kidman Resources.  

The future of mobility: With Softbank investing in Nemaska Lithium, we took a deeper look at their past investments in the autonomous driving and clean energy spaces. Clearly, the massive fund, led by visionary investor Masayoshi Son, is looking at the future of mobility and the world as a whole when picking their investments.  Often, they are even taking early stage stakes in these companies before they go public. If the future plays out as expected, Softbank will surely have their tentacles in many major sectors of the economy.

Energy Storage: Most of the world is neglecting energy storage, and its impact on lithium demand over the next decade (primarily because EV demand is expected to be so high by itself).  However, anyone following the energy game closely knows that new announcements have been coming out every day concerning the adoption of grid storage batteries by power projects around the world.  The latest example has the US getting in on the party.  A new proposal in Colorado calls for a total of five solar power plants, three of which include energy storage.

Sticking with the US: Reuters wrote an interesting story on the US lithium mining sector, and the country’s efforts to cut their dependence on China for EVs and EV components. The story does a good job outlining the projects, some of which we’ve talked about in the past, like Piedmont Lithium.  Ironically, even though the story is about US projects, many of the miners are Canadian and Australian based and listed companies.

Really Chile?: While Australia formed a task force to further find ways to capitalize on their abundant energy metals resources, and China continues to encourage massive investment in the battery powered future, Chile’s government seems solely focused on collecting their royalties as opposed to nurturing their miners and incentivizing them to invest further in the country.  The latest example is a new committee the government announced on Monday, that will supervise lithium contracts the state has with local miners SQM and Albemarle Corp.  The committee will be there to make sure concession agreements between the country and the companies are followed.  Look, policing agreements with companies is not a big deal on its own. However, our issue is with the fact that this is all Chile seems to be focused on- collecting the high rents from producers.

Indian Batteries: It’s no secret that India consumes a lot of batteries, especially given their massive population.  This will only increase as the country continues to expand economically over the coming decades. Much like China, India is looking to drive electric vehicle adoption to curb pollution.  However, given that the country doesn’t really produce Li-ion batteries in house, this means they are very dependent on the outside world. Aiding in solving this problem in an MoU that was signed last week for the transfer of technology for India’s first Li-ion battery project between CSIR’s Central Electro Chemical Research Institute (CECRI), Karaikudi, Tamil Nadu and RAASI Solar Power Pvt Ltd.

Stay tuned via twitter and email to get our analysis as it hits the tape!