Tipping Points and Tesla’s battery dilemma – by Alf Stewart (Resource World Magazine – July 6, 2017)

 

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Tony Seba’s excellent You Tube video, Clean Disruption – Why Energy & Transportation will be obsolete by 2030 – (Oslo, March 2016), covers the concept of tipping points and expands on the concept of our society being on the cusp of a revolution in energy and transportation.

It explains that new developments in solar panels, lithium ion batteries, electric cars and autonomous driving are simultaneously converging to create a shift away from oil and towards electricity to power self-driving cars, charged on smart grids, using power from solar renewable energy. Resource World readers, however, are mostly interested in any new opportunities in resource stocks stimulated by this shift.

At the centre of this are Elon Musk and his revolutionary Tesla cars, Powerwall batteries, and solar panels. Musk has disrupted the automobile industry by launching electric cars with performance characteristics so good that they broke Consumer Reports reporting scale for cars by scoring a perfect 100. Tesla Inc. [TSLA-NASDAQ] did this by delivering incredible performance at the same time as delivering unbelievable economy, handling, comfort and interior space.

Musk’s Tesla is now ramping up its Nevada-based Gigafactory to produce batteries, in joint venture with Panasonic, to power its mass market Model 3. It is reported that this factory will produce more lithium ion batteries than all the other battery plants in the world at this point in time. We have been researching the implications of this massive development on the inputs to battery manufacture for resource stocks.

Not much in the near term. The global market for electric cars is only 1% of total vehicle sales so even dramatic growth will not change oil demand in the near term. Lithium is just the butter on the bread of the lithium ion battery sandwich with the lithium ions shuttling back and forth between the anode and the cathode. Lithium is not the most expensive part of the battery or even the largest component in the battery.

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