It’s time to jump back into lithium, we said on Sept. 28.
All as demand begins to show signs of outweighing supply. You see, lithium could easily run into a massive supply crunch. All thanks to electric vehicle (EV) sales that are growing much faster than anyone expected.
For one, “Benchmark Minerals forecasts lithium demand to reach 2.2m tonnes by 2030 but as things stand lithium supply (LCE) is only set to reach 1.67m leaving a huge structural deficit. This demand will be driven by growing EV adoption through the 2020s, with Benchmark Minerals forecasting an EV penetration rate of 4.3% in 2020 rising to 30.7% in 2030.”
Two, according to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales. By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.
Three, ”All the supply from the globe’s major lithium miners Albemarle Corp., Soc. Quimica y Minera de Chile SA, Tianqi Lithium Corp. and Ganfeng Lithium Co. — companies that mine mainly in Australia, Chile and China — probably won’t be enough to meet demand,” reports The Washington Post.
Four, “There’s only one thing standing between Tesla and world domination, the global supply of lithium. And that’s good news for lithium producers,” as Barron’s just reported.
In addition, “Right now, the world mines roughly 400,000 tons of lithium a year, enough to power 2 million to 3 million electric vehicles, though only a third of that goes to EVs right now. That number will have to increase perhaps as much as tenfold to meet Musk’s goal, and that doesn’t take into account other automakers.”
The last time we spoke about lithium stocks on Sept. 28, we mentioned you should keep the following stocks on radar:
- Lithium Americas (LAC) ran from $10.11 to $15.86
- American Lithium Corp. (LIACF) ran from 73 cents to $1.16
- Albemarle Corp. (ALB) ran from $86.15 to $94.76
- Sociedad Quimica y Minera (SQM) ran from $30.72 to $35.46
- Piedmont Lithium (PLL) is the only one that fell so far, from $36.98 to $34.66