The hot commodities with leverage to the electric vehicles boom – by Peter Klinger (Australian Financial Review – November 15, 2016)

It was a question out of left field at Tesla Motors’ shareholder meeting in California in May 2016. “Will you be able to source enough lithium to achieve your ambitious electric vehicle growth targets?” a shareholder asked Tesla’s billionaire boss, Elon Musk.

The query summed up the reason so much of Australia’s mining sector is enjoying an extraordinary lithium boom that could wash over into sections of the graphite world.

And as much as Musk tried to hose down concerns his global ambitions could face headwinds because of a slower-than-expected supply-side response to lithium and other commodities, it’s the sort of question the plethora of ASX-listed hopefuls are lapping up with glee.

“There is definitely no supply issue with lithium,” Musk responded. “[Perhaps the question should be] in the timeframe [of] the next year or two, will there be lithium in the form Tesla needs, which is lithium hydroxide, in sufficient quantities, at a price that is reasonable and doesn’t affect the cost of the Model 3?”

It is a preoccupation in boardrooms of miners and battery-makers around the globe as they try to work out how best to profit from an explosion in electric vehicles (EVs), from about 1.3 million today – or 0.9 per cent of global vehicle stock – to at least 3 per cent by 2020.

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