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

Benchmark Lithium Prices from 2016 to now:

I’ve marked up on the chart below the high and low of Benchmark’s global weighted average lithium carbonate price in big red lines:

High: ~$70/kg
Low: ~$8/kg
Today (dashed red line): ~$55/kg

@benchmarkmin The chart shows a few things:

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.

Benchmark interview with Wang Xiaoshen, president @GanfengOfficial - one for the very few true pioneers in #lithium.

On how low #lithium prices can go:

“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…

Lithium Prices <thread>

Morgan Stanley et al putting out lithium price decline narratives.

There is zero industry evidence to suggest lithium’s price decline from all time highs is today or even tomorrow

(TBD @ Benchmark Week, 14-18 Nov, LA > events.benchmarkminerals.com/event/759109c6… ) 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.

<thread> Tesla & #Lithium - a decade in the making

A lithium refinery has been in Tesla & Elon Musk’s @elonmusk thinking for ~10 yrs now & in (a serious way) for the best part of 3 yrs

The logic is sound

2020: 70-80% of lithium ion battery costs are raw materials

2010: 20-30% Tesla has filed to build a lithium hydroxide refining facility in Texas (Gulf Coast).

This is a revisiting of its 2020 plan to build a spodumene conversion facility to make lithium hydroxide at #GigaTexas

Originally planned to launch Q4 2022.

Ford Flurry:

✅ Ford signs major deal with China’s CATL

✅ Locks in 60GWh of battery cells out to 2023 (variety of suppliers)

✅ Ford plan to establish 40GWh LFP capacity in North America (Canada?) - CATL Gigafactory?

✅ Mustang Mach E to use LFP

✅ EV CAGR 90% to 2026 Interesting to note: Ford says it has secured 70% of its lithium ion battery needs by 2026

To support 2m run rate of EV production.

Assuming this is full EVs this is 160GWh of cells a year by 2026.

This year the lithium ion battery industry will be ~600GWh total

Panasonic to build second gigafactory in De Soto, Kansas. @benchmarkmin anticipates this $4bn investment to be for 50GWh battery plant

Tesla partnership central but don’t expect Panasonic’s US strategy to be just for Tesla

De Soto = 717 miles from Austin, 793 miles from Detroit A major part of Panasonic’s US strategy will be to shrink the supply chain

Critical minerals mine & refining capacity will need to be established feed what will be a new Panasonic super-site

Cathode, anode, lithium, nickel, graphite, cobalt, manganese on alert in USA and Canada

We’ve seen this before, we will see it again. Goldman Sachs: you can’t just add up all the #lithium mine level potential & make an oversupply call

The speciality chemicals world is more nuanced than iron ore

It’s why the world doesn’t rely investment banks for research any more To make forecast calls especially for Nickel and Lithium at the moment should be regulated.

Much like our IOSCO price assessments.

There should be a min amount of expert work required to make such high profile calls that impact investors, esp the retail community.

When #EV OEMs need to become miners has been the Benchmark story of 2022. @benchmarkmin

What we mean by this is outlined in this thread: Future EV demand is surging beyond the ability of the lithium ion battery supply chain to respond in full.

#BASF freezes new business in #Russia but commits to existing business which includes developing a ‘zero carbon’ nickel pipeline into Germany via Finland for lithium ion batteries and #EV reuters.com/article/ukrain… European battery and EV makers need the more localised Nornickel - BASF nickel unless they want to rely more on Indonesia and China sources for the bulk of nickel needs.

And comes with its own ESG issues to deal with: tailings disposal, deforestation, carbon footprint.

#Russia’s nickel & Germany’s #cathode and auto #EV industry.

Nornickel + #BASF: An long term term partnership descends into an unholy alliance

As Russia attacks Ukraine, our industry’s eyes are fixed on @BASF and what it does next

And here’s why…

#UkraineUnderAttack Russia’s Nornickel (Norilsk) supplies 20% of world’s class 1 nickel - the suitable supply for lithium ion batteries and #ElectricVehicles (and 7% of global nickel)

Most of this goes to China.

#UkraineUnderAttack

#RussiaUkraineConflict - we are getting a lot of inquiries about Russia and critical minerals, esp for #ElectricVehicles & #batteries

A few @benchmarkmin facts:

#Nickel is on red alert.

Norilsk is the world’s largest class 1 nickel producer accounting for 20% of global supply Norilsk overall accounts for 7% of all in nickel supply. But EV makers, auto OEMs and battery cell producers will terrified of losing 20% of a market with prices already at decade long highs.

Benchmark Lithium prices - Battery Grade, EXW China @benchmarkmin

Nov 2018 $11,875
Nov 2019 $7,950
Nov 2020 $6,100
Today $30,025

Structural shortage is set to hit in 2022.

Lithium carbonate prices are at all time highs but easy to see them soar above $40k in 2022 Lithium is the key element that this entire low carbon economy is being built on. With low cost energy storage en masse, speed, scale and economics will fall apart

The passed £1 Trillion US #InfrastructureBill is set to send lithium into a super bull market next year.

Lithium ion battery prices are going up for the first time. Some said it would never happen. #EV

But rising lithium prices are the cause.

172% increase in Benchmark Lithium Price Index since this time in 2021 says it all

Automakers to take the hit

More TBA @benchmarkmin Lithium carbonate price increases have hurt the most.

These have risen 200% y-o-y on the Benchmark Lithium Price Index

❗️High raw material prices are starting to push some lithium ion battery cell prices up

This is what ⁦@benchmarkmin⁩ warned of last year below

To understand batteries you need to know your supply chains #lithium #nickel #cobalt #graphite #manganese benchmarkminerals.com/membership/lit… How Team @benchmarkmin called an end to the major declines in lithium ion battery prices.

A must read here: benchmarkminerals.com/membership/ben…

<thread> Lithium prices.

In 2019 I was asked whether lithium prices in the next price surge would ever reach the highs of 2016.

My response was this time it would be more aggressive. Instead of the late 20s, prices in China would exceed $40,000/t

There are a few reasons… This time there are more buyers than in 2016.

There are still not enough sellers: miners, refiners.

Demand for lithium is outstripping the rate supply is growing by double.

The wall of EV demand for lithium continued to build, esp 2026 and beyond.

Lithium & Afghanistan. <thread>

Back to the future. We were discussing this in 2010.

The reality now is the same then. The potential is interesting but super long term if ever.

Lithium isn’t rare and Afghanistan has occurrences of lithium. But so does my back garden.

… I was invited out to Afghanistan in 2010 by the USGS to see for myself. Not just lithium but copper, iron ore, and a handful of niche minerals like niobium.

Unfortunately, my old company blocked the trip on travel insurance grounds.

…

<Tesla and Lithium >

5 @benchmarkmin Charts you need to know about Tesla and it’s lithium hydroxide production / spodumene plans.

1. Tesla is now official upstream of the lithium ion battery supply chain

✅ New cathode plant
✅ New Lithium Hydroxide plant 2. Lithium chemical refining is going global, not just in China

Production of lithium from spodumene has traditionally been the reserve of China.

Lithium chemical plants are now being established outside of China incl 🇦🇺 🇯🇵 🇰🇷 and now 🇺🇸 (Tesla)

<thread> My third testimony to the US Senate, June 2020: key points

China is building the equivalent of one battery megafactory a week, the United States one every four months. In that time, we have witnessed a global battery arms race and watched the world’s number of supersized battery plants – known as battery megafactories or gigafactories – go from 17 to 142 [now 167]

[@benchmarkmin thread] Pertinent points on Tesla’s plan for produce lithium, the first auto maker to do so.... New lithium hydroxide facility expect to be co-located next to Terafactory in Austin

Tesla LFP Model 3 (Standard Range) Made in China are rolling off Shanghai now.

LFP is naturally cobalt free anyway: balancing low cost (using iron and phosphate) with range is key here... it’s not about cobalt

Read Tesla’s strategy: benchmarkminerals.com/membership/lfp… These LFP prismatic cells for Model 3 are the CATL deal @elonmusk was referring to on Battery Day