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Friday, January 15, 2021

Electric Cars Are Coming: Lithium-Producing Giants’ Stocks Expect E-Vehicle Boom

When the world is facing so much uncertainty about oil and gas with Big Oil giants selling off assets and so on, there is a boom in the lithium producers’ department. To say the least, the only barrier between world domination and Tesla is lithium supply. And that is very good news for lithium-producing giants.

Tesla To Launch 30 Million Electric Cars By 2030

On September 22, Tesla (TSLA) marked its battery day by laying out plans for the future. Elon Musk, CEO of Tesla, announced that the company has plans to manufacture huge amounts of Tesla battery capacity. This will be used for a bigger project as Tesla expects to launch 30 million electric cars and other electric vehicles by 2030. This is up from approximately 500,000 electric cars till 2020. In the next decade, the company is set to play on a different level altogether.

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Such a decision doesn’t work in isolation. There’s a lot going on behind Tesla’s plan to notch up its electric car game. That is to say, such a huge increase in production requires an equally massive increase in demand or at least mass acceptance of electric cars. People need to prefer lithium-powered vehicles over the traditional fuel-engine ones.

This also means a rapid increase in lithium battery production. Musk’s goal sounds dreamy as the world currently mines around 400,000 tons of lithium per year which can power up to 3 million electric cars. To meet Musk’s proposal, Lithium mining will have to increase ten times that too excluding other e-vehicle manufacturers.

Lithium Stock Prices To Soar As Lithium Demand Increases

Latest reports suggest that Tesla signed a sales deal with Piedmont Lithium (PLL) this week to further its plans. This mining company has promised to deliver Tesla’s required product by the next three years.

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Albermale, SQM, and Livent are among the other Lithium miners that are to win from the upcoming lithium-powered e-vehicle boom. The Tesla-Piedmont deal is for the supply of 60,000 tons of a form of lithium. This will only be enough for the manufacture of approximately 200,000 batteries. However, if Tesla is to reach anywhere near its decade goal, there is a lot of potential growth in the lithium department in the coming years.

Lithium mining industry experts claim that the prices of lithium should go up in the next few years. The prices had fallen flat after the economy went into a recession with lithium priced at only $7000 per ton.

How high the prices go up with the recent developments in the sector is another thing to guess. Investors trying to benefit from the next potential high, are increasingly investing in the lithium sector. Buyers are also in a trend of picking up cheap stocks to work with in the long run.

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