The following is a wonderful article by Charles Morris that communicates several important points superbly. It presents a bit of a different take on lithium than we’ve typically been presenting, while still referencing a comment from a battery exec that emphasizing a key point we’ve been communicating for years. That key point is that while it may take just a year or two (this exec says two) to build a battery factory, it takes at least 5–7 years (this exec says 8 years) to get a new lithium mine into production.
I think it’s worth giving the argument Charles presents a lot of attention, but I still side with all of the lithium experts I’ve talked to in the past few years, who forecast a big imbalance in lithium supply and demand due to not enough firm commitments and financing for lithium years in advance (whether from battery makers or automakers, but stemming from not having firm enough commitments and orders from automakers). Aside from the supply-side issues here, I think one shouldn’t discount what could happen with regards to demand. We already see rapid adoption of EVs in Europe and China (and you might even say the USA), and it’s just 2022. We already see a good number of truly competitive mass-market EV models, and it’s just 2022. We’ve also already seen an enormous increase in lithium prices in the past couple of years. By 2025 onward, I think a good portion of the public in most of the world will realize that it makes little to no sense to buy a fossil fuel vehicle. They may want to buy an electric vehicle ASAP, or they may decide they want to buy one within the next few years, but the bottom line is that automakers will need to sell a ton of EVs in order to keep their sales up and not end up in bankrutpcy. That means they will need a ton of lithium (well, many tons of lithium), and I don’t think there will be enough lithium mined and refined by the end of the 2020s for global demand — not nearly enough. But we shall see.
For now, give this article from Charles some serious thought, because it does offer a sliver of hope and is based on market experience with many other products and technologies.