Lithium Prices Set To Jump As Tesla Doubles Global Battery Production

Tesla launched the Gigabit plant in the first week of 2017, which could be a turning point in the energy storage industry.
Geely plant in Nevada will begin mass production of lithium
Ion batteries for Tesla Model 3 electric vehicles and their energy storage systems.
Tesla and its Panasonic Partners at Geely plant plan to hire 4,000 people to work in the plant in 2017.
Tesla predicts that 35 gigawatts of lithium will be produced by 2018.
Each ear\'s ion battery is equivalent to the sum of the batteries produced elsewhere in the world.
In other words, the factory will double the global battery production capacity next year.
So far, battery production has been dominated by companies outside the United States.
It is estimated that battery production in China, South Korea and Japan accounted for 88% in 2015, mainly led by companies such as LG Chem and Samsung.
With the establishment of Geely factory, the distribution of market share will suddenly change.
Increasing battery production to such a large extent will certainly reduce the cost of the battery.
Improving automation, standardizing, economies of scale, learningby-
Lower capital investment per watt
The production of hours may lead to industry
Significantly lower costs.
However, the obstacles facing Tesla are still large.
Tesla promises to start shipping Powerwall home energy storage systems in the coming weeks;
It promised to sell 500,000 Model 3 cars by 2018, which is only possible if the battery production speed of the Gigabit factory is rapid;
It cost a lot of money to buy SolarCity;
After repeatedly disappointing shareholders, it has a small margin of error with Wall Street in the financial aspects of the house.
Tesla is notorious for missing deadlines, but has impressed the market in recent months.
It delivered a 20 MW energy storage system for a California utility in a few months, and the project usually takes years.
It also accelerated plans for Geely\'s plant, hired a lot of people ahead of schedule, and promised to increase production several years ahead of schedule.
\"We believe Tesla\'s battery sales are accelerating,\" Baird analyst Ben Kallo told Bloomberg . \".
\"Tesla\'s production of energy and Model 3 may exceed expectations.
Baird named Tesla one of the best stocks in 2017.
The final result may be that electric cars will be cheaper in the next few years.
According to Bloomberg New Energy Finance, battery prices plunged 22% last year and are expected to drop another 15 to 20% this year.
The doubling of global battery production capacity will not only lead to an acceleration in the electric vehicle market, but also lead to a massive bull market in another industry, lithium.
According to the Financial Times, electric vehicles use 4,800 times the amount of lithium as smartphones, so the accelerated adoption of electric vehicles has caused the supply of lithium to be very tight.
As of 2025, lithium demand could grow by 16% per year, which, according to Morningstar, will be the fastest growing among any other commodity in the past century.
Lithium prices rose 60% last year, three times higher than in the past three years.
While there are four major lithium miners in the world-Albermarle, FMC and Tianqi Lithium miners-the smaller ones are beginning to increase.
There are more than a few such places in Nevada, where there is a wealth of lithium reserves (it is no coincidence that the Tesla Gigabit plant is located there ).
The Financial Times believes that the global lithium reserves are not short, but it is technically difficult to extract lithium, which means that miners may have difficulty keeping up with demand.
\"The supply is tight and you need more,\" Argentina CEO Richard Sevilla --
Based on lithium-ion miner\'s lamp, Orocobre told the Financial Times.
\"But the challenge is that things take time and the supply response to demand is often too optimistic.
\"Lithium supply will be a key factor in the speed of battery production, which in turn will play an important role in determining the launch of the new electric vehicle model.
Last month, the United StatesS.
This is the month with the highest sales of electric vehicles.
This month, electric vehicles sold 25,000 vehicles, accounting for less than 1% of the entire car market, but sales grew rapidly, up 37% year on year in 2016.
Tesla\'s gigabit plant is likely to provide an impact on these sales figures in the coming years.
Nick Cunningham from Oilprice