Some call lithium “white gold,” but in fact, lately the light metal has been beating gold in appreciation, becoming the hottest metal of 2016 for commodities traders. Although lithium’s price rise has slowed in recent months, the fundamentals suggest strong potential for long-term growth, according to James Stafford of Oilprice.com.
“There is no doubt as to the push that Tesla has given the current automotive transition toEVs,” writes Stafford in a recent article. “Since 2014, when Tesla first announced the Gigafactory with Panasonic, other manufacturers have begun to take notice and take action. Volkswagen announced last week that it was considering LG Chem or Panasonic as partners for several $2-billion factories, according to Bloomberg.”
“Combined with Daimler putting $550 million into tripling its battery production capacity in Germany, Nissan’s planned investments in the UK for its third generation Leaf, and GM’s joint venture with LG Chem to produce batteries in Holland, Michigan, for its Volt and Bolt, it is clear that auto manufactures are beginning to shift to electric—and in a very big way,” Stafford continues.
Stafford expects plug-in vehicle sales to grow by over 60% per year, to reach over 600,000 by 2018. The market will need two new lithium mines in operation to even begin to sate the demand.
As impressive as that sounds,, the real game changer for the lithium industry may be electrical grid storage, says Stafford. He also notes that “no new battery chemistry will supplant lithium in battery cathodes for decades, and lithium cathodes are the centerpiece of several leading chemistries which are already available.”