Tesla, LFP & Model 3 in China 🇨🇳. @benchmarkmin will publish takeaways tomorrow. Sneak peek here:
For China only made and domestically sold:
- LFP to be used in Model 3 short range (CATL)
- NCM811 to be used in Model 3 long range (LG Chem)
All about cost. Not about cobalt.
Tesla’s LFP Model 3 is still expected to qualify for China’s EV subsidies due to Tesla’s BMS pushing their cells further.
The move isn’t about cobalt but the need to reduce Model 3 to make it work for Chinese market. Significant cost decrease >25%. #Tesla
Tesla is naturally low cobalt anyway via NCA (Panasonic) and NCM811 (new deal in China with LG chem). Cobalt isn’t the headline, it’s exposure about as low as it gets. Making Model 3 production cost low enough for China is the headline. #challenges
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Tesla’s Master Plan 3 believes it will take $1.4 Trillion dollars to invest in critical mineral mining, refining and cathode / anode making for the energy transition.
ie 240TWh of deployed batteries around the world.
$2Tr in gigafactories and battery recycling
All in all to reach net zero with the technologies we have today Tesla and Elon Musk have laid down a $3.5 Trillion dollar gauntlet for the energy transition
The numbers are almost bang on the low end what we have at @benchmarkmin - we estimate $3.5 to $5bn
We anticipate that mining will need the lions share of this investment
That high and volatile lithium prices are here to stay. High from a perspective if you were in the industry in 2016, low if you joined in the last two years.
That volatility is the name of the game now as lithium rushes to scale supply from a wide variety of sources all with a wide variety of costs to get out of the ground.
No longer do we look to the Atacama as the low cost base line for our narrative like back in 2016, but to… twitter.com/i/web/status/1…
“It’s hard to say. These days people are looking at 150,000 RMB ($21,807 a tonne), that has a bigger chance to be achieved,… twitter.com/i/web/status/1…
On 2022 v 2023:
“Last year was booming … Lots of battery companies and OEMs were very aggressive about expansion so they gave big numbers for requirements for upstream resources like lithium, encouraging everyone to expand, especially lepidolite and DSO [Direct Shipping Ore]… twitter.com/i/web/status/1…
On lepidolite in China:
“Below 100,000 RMB only a few and smaller volume [mines] can be justified. But we believe the big volume that everyone was expecting would probably be in trouble.”
This is at time when lithium prices are at an all time high & stable. There isn’t even a murmur of price declines as all new lithium carbonate and hydroxide supply is snapped up.
It doesn’t take a genius to make a call that lithium prices will eventually come down.
Lithium is one the longest price rallies in any “commodity” in recent memory.