I see lithium as the single most bullish commodity in the world right now. Prices are just starting to turn up after a three year bear market, and I think they have a LONG way to go.
The demand story here is global and obvious.
The car manufacturers have gone ALL IN on electric vehicles. This isn’t just Tesla (TSLA-NASD; $700)—this is everyone.
By the end of 2024 there will be 100 different new models of Electric Vehicles (EVs) on the road1. Many more are coming by 2025.
There won’t be a trickle of new EVs like we have had coming at us to date. Starting now, EVs will be coming out a gusher out of a firehose.
General Motors (GM-NYSE; $59) is spending $27 billion on EVs and will have 30 different models2. By 2035 GM plans to be 100% electric.
Ford (F-NYSE; $12) is spending even more, $29 billion with plans for 40 different models3. Audi has 30 models of its own coming.
It goes on and on. Hyundai vows to have 23 EVs, Jaguar is going all-electric, Toyota has plans for 60 models.
Volkswagen plans to have built 1.5 million EVs across its brands by 2025 and Volvo has pledged to have sold 1 million EVs by 2025, representing 50% of its sales.
This is what is coming. It is a TSUNAMI of electric vehicles. Every single one needs a lithium-ion battery.
Lithium-ion batteries will come from the gigafactories—what a futuristic word! And lithium is the future.
These are massive facilities that will be cranking out enormous volume of lithium-ion fuelled EVs. There are now just FIVE gigafactories in Europe—but there are already 20 in the works. So the number is going up exponentially!
European EV sales grew so much in 2020 that they actually beat China. Sales of plug-in passenger car in Europe skyrocketed 137% year on year, now to 1.4 million units. That huge growth in EV sales happened despite a terrible auto market that saw total car sales fall 20%.
China’s EV sales grew rapidly too. The beast is unleashed folks. The full-scale transition to Electric Vehicles is now underway.
Lithium prices are now surging——up almost 100% year to date according to Benchmark, on the back of heavy demand for lithium iron phosphate (LFP) batteries.
That will still put Europe—which will have eventually have 300 gigawatt-hours of capacity—a distant second behind China in terms of capacity though. China is also expected to double manufacturing capacity from 345 gigawatt-hours to 800 gigawatt-hours by 20305.
There are estimated to be 1.4 billion automobiles on the road today. Only 10 million of them are electric——so the lithium demand we have seen so far is just one raindrop before it starts to pour.
It is A CERTAINTY that the electric vehicle count on the roads is going to go up from ten million to hundreds of millions.
Demand, upon demand, upon demand.
This isn’t going to create some nice growth in demand for lithium……this is going to be a disruptive force that few (if any) commodity markets have ever experienced.
It is GO TIME for investors who want to profit from this!
The Problem – Lithium Supply Can’t Respond Quickly
Big money gets made by investors who “get long” disruptive trends.
We have had some big disruptions already this century. E-commerce, video streaming, social media platforms——none of these things even existed in the 1990s. Now the biggest, most valuable companies in the world come from those sectors.
The transition to Electric Vehicles is another big disruption.
Analysts at SP Global are projecting that lithium demand is going to increase by 10X over the next decade6. UBS thinks we need to increase current battery power (and lithium consumption) 13 times by 2030 if we want to supply the demand coming from EVs7.
Whatever the exact number is doesn’t matter. This one is as plain as the nose on your face. Lithium demand is exploding exponentially higher.
Now here is what is becoming an obvious problem……how can we possibly ramp up lithium supply fast enough to meet at 10 or 13 time increase in demand in less than a decade?
The honest answer is: I don’t think we can.
At least not at the price that lithium has been trading over the past two years—and that is why lithium prices are now starting to move higher. The market is doing its thing…smelling the demand explosion…and price is responding to try and stimulate supply.
But creating a lithium supply response isn’t as simple as turning up the commodity price. Lithium supply has a complication, a problem…it takes FOREVER to bring new lithium supply online.
Like every other metal, you have to find an economic deposit, get permit after permit, finance it, build it…blah blah blah. That’s 5-10 years.
But much of the new lithium has one more problem other metals don’t have. Once the mine is built for every other metal, you can produce ingots or concentrate within days.
The majority of lithium produced globally is done through a brine method that requires waiting for pools of salt water to evaporate, leaving behind concentrated lithium deposits. That’s an extra 12-18 months of WAITING. I hate waiting.
You can’t speed this process up…this literally involves waiting for nature to take its course. This is a slow process. This creates a very volatile situation for lithium prices.
On one side you have everyone on the planet doing everything they can to stimulate demand for lithium.
Auto-manufacturers are pushing EVs, governments are mandating EVs, consumers want to buy EVs, technology advances are making EVs more mainstream…DEMAND IS MOVING FAST.
On the other side you have a supply situation that moves at a snail’s pace. New supply involves having to wait for water to evaporate……SUPPLY IS MOVING SLOW.
It is a recipe that is setting lithium up for a massive market imbalance.
It is also a recipe for someone to make a lot of money.
A Technical Breakthrough in Lithium Production
Could Solve This Problem!
Whenever there’s great demand, innovation follows. We need new lithium supply and we need it fast. I expect we need it a lot faster than even the most bullish analysts expects because COVID has launched the green revolution.
A new source of gold supply came with “no-see-um” gold in Nevada. Copper production increased with a copper oxide process called SXEW. George Mitchell discovered how to get oil out of shale.
With lithium, the solution (pardon the pun) may be DLE—Direct Lithium Extraction.
What does that mean?
DLE involves running bring through a (surprisingly low tech) process that removes the lithium immediately–within HOURS–rather than waiting 18 months or years for nature to do it for you.
By immediate, I mean immediate. DLE turns an 18 month plus process into minutes-to-hours. This is a step change for lithium extraction. It is a game changer for the entire industry. I have been pounding the table on DLE for two years!
Now here is how we play this.
I have a micro-cap stock that is the perfect way to get long rising lithium prices AND to get long Direct Lithium Extraction.
This company has a big lithium resource and it also has a DLE technology that is going to change this industry.
It isn’t a “fingers-crossed” technology. It works, the results are in.
The company has a Chinese partner—an established lithium producer–who have been testing their proprietary DLE process on this junior’s lithium brine.
Recent news from those tests doesn’t just show the speed of lithium production expected…it also shows that the process increases recoveries of lithium to 80% from conventional evaporation.
Investors don’t have to cross their fingers here. This company’s DLE works; the results are in. They can produce lithium in hours, not 12-18 months. Months to minutes!!—AND—they just nearly doubled their recoveries to 80%. It’s a game-changer.
DO NOT MISS MY EMAIL TOMORROW!!!!
Lithium prices aren’t just moving now…they are off to the races. I see it as the most bullish commodity of any
I’m investing in right now. There is no spare capacity of lithium in the world—NONE!
Tomorrow I’m hand delivering you the perfect micro-cap lithium stock.
This stock ticks all my boxes:
- Tight share structure
- High grade lithium salar
- Already at pre-feasibility stage
- Millions in the bank
- Has a Chinese partner—A LITHIUM PRODUCER–that is paying the bills to test their DLE technology, wants the offtake, and provides an obvious exit strategy for shareholders
Lithium is the most bullish commodity. Tomorrow you get my choice for the most bullish stock in the most bullish commodity—name, symbol, and all the details on their DLE technology.