Tesla Million Mile Battery, GM Ultium, and the Position of Lithium Mining Community 

Summary

• Tesla claims its “million mile” battery to be disruptive in terms of cost and range and is gearing up to unveil the detail sometime during the month.
• The million-mine battery is expected to bring the cost per kilowatt hour within USD 100, which should bring the running cost in par with the ICE engine and could further provide an impetus.
• Teslas’ competitor- General Motors has already unveiled its Ultium batteries, which, as per the Company, could be optimised for energy storage due to its layout.
• Amidst the emergence of battery-tech, global lithium mining companies such as SQM are optimistic over the demand growth, and some like Albemarle are engaged in aggressive takeovers.
• Albemarle proposes to fully acquire the world’s largest lithium deposit- Greenbushes in Australia in which the miner currently holds 49 per cent stake.
• ASX-listed lithium mining companies remain focused on cost-cutting and limiting production to bring supply it in line with the demand from customers.

Tesla is gearing up to introduce a low-cost, longer-lasting battery for its EV models which has been colloquially called a “million mile” battery, which the Company has been developing with the Chinese battery manufacturing giant- Contemporary Amperex Technology Co. Ltd (or CATL). If the battery delivers on its promise, it will allow Tesla to maintain its position in the industry when it comes to squeezing the range out of the lithium-ion battery.

While the previous announcement related to the million mile battery was expected to hit the market on the Battery Day for investors, but thanks to the COVID-19 outbreak the announcement has been further postponed with CEO-Elon Musk planning to release a webcast followed by an in-person meet sometime during this month, inferred from the Tweet by the Tesla CEO.

Source: Twitter

Furthermore, Tesla CEO had mentioned that the new battery aims to drag down the cost per kilowatt hour within USD 100, which as per many industry experts should bring the cost of EV engine at par with the Internal Combustion Engines (ICEs).

Competitor-GM Eyes the Million Mile Space As well

In March 2020, rival General Motors (or GM) laid out its EV strategy and revealed a new improved battery pack called Ultium, developed with the partner LG Chem. The Company also suggested that the design of the new battery pack is unique due to its large-format and pouch style cells as compared to the conventional cylindrical cells, which as per the automobile manufacturer allows it to stack vertically or horizontally inside a battery pack, allowing engineers to optimise the energy storage.

Ultium batteries are currently being estimated by GM to deliver 50 to 200 kilowatt hour, allowing the vehicle to cross over 400 miles (at full charge) with 0 to 60 miles per hour acceleration in just 3 seconds.

While many global giants are deep diving into the battery technology sector to bring the cost at par with the ICE engine in order to promote further sales, the lithium space is going further tight with lithium chemical prices dropping ahead, prompting lithium mining companies across the globe to keep a tab on the supply chain.

To Know More, Do Read: Lithium Mining Companies Optimistic Despite Snail-Pace Demand for Battery Metals- GXY, PLS

However, global lithium mining community as a whole is optimistic over the demand growth for the white metal alongside the penetration of EV worldwide, and many of the lithium mining companies are still engaged in aggressive takeovers such as Albemarle.

Also Read: Lithium Charter, Domestic Miners, And Global Stance- KDR, MIN, A40, GXY, And PLS

Albemarle To Fully Acquire Greenbushes Lithium Mine

Albemarle- the global lithium mining behemoth is currently eyeing a full control of the largest lithium mine in Australia and across the globe- Greenbushes, in which the miner presently holds 49 per cent stake.

As per some media reports, Tianqi Lithium Corp, which presently holds 51 per cent of the lithium mine in Australia, is selling some its crown assets to bring down its debt. Furthermore, while Albemarle had shown interest for completely owning and operating the Greenbushes lithium asset, in the recent past, the miner had adopted an aggressive stance with its intention to block any other competitor to get its hands on the asset via using the right of first refusal.

Also Read: SQM Optimistic on Lithium; Lithium Stocks Firm on the Australia Securities Exchange

While some of the global miners are bidding aggressively to takeover prized assets worldwide, ASX-listed lithium mining companies have adopted a rigorous policy of cost-cutting amid limited production, which majority of miners now anticipate to match tune with the demand from potential customers, leading to some control of the global lithium supply glut.

To Know More, Do Read: Lithium Producers Changing Tactics Amid Falling Prices

PLS- An Example of Changing Tactics Among ASX-Listed Lithium Mining Companies

While a paradigm shift in the corporate and business strategy across many lithium mining companies is evident, one such strategic shift has been witnessed in the recent events when the ASX-listed Pilbara Minerals Limited (ASX:PLS) inked a share subscription from the Chinese battery mammoth CATL.

Currently, the miner holds strategic relationship and partnership with General Lithium, Ganfeng Lithium, Great Wall Motors (SVOLT), POSCO, CATL and Yibin Tianyi, and post witnessing a drastic fall in its spodumene demand at the end of the year 2019, the miner has now adopted the strategy of moderate production as demanded by customers, which at present, seems to be working out for the miner, inferred from seeing the performance of past two quarters, where the spodumene shipment of the miner was more than its production.

PLS- Quarterly Spodumene Shipment and Production Graph (Source: Company’s Report)

Key Takeaways

Tesla is already breaking solid grounds with many of its disruptive long-range EV models such as Tesla Model 3 and is further planning to convert its mega factories into giga factories, which would have almost threefold more capacity.

Currently, Tesla’s CEO Elon Musk has promised to unveil details about its “million mile” battery, which was originally scheduled to be detailed on the Battery Day for investors, organised by automobile companies to showcase new technologies, which of course due to the COVID-19 outbreak has been postponed, but the market can expect the announcement related to the same sometime in this month- as suggested by Elon Musk in a recent Tweet.

General Motors has already showcased its Ultium batteries and had suggested that it could be optimised for energy storage due to its layout while delivering 50 to 200 kilowatt hour of energy with 0 to 60 mile per hours in 3 seconds.

In the meantime, lithium miners across the globe are aggressive in takeovers and standing optimistic over the growth of lithium and its chemicals demand. Albemarle is currently aiming at acquiring the world’s largest lithium deposit- Greenbushes, in which it presently holds 49 per cent interest.

SQM- the Chilean lithium chemical giant remains confident over the future outlook of the white metal, while ASX-listed lithium mining companies such as Galaxy Resources Limited (ASX:GXY), Orocobre Limited (ASX:ORE), Pilbara Minerals Limited (ASX:PLS) are taking a look at their cost while keeping the production in line with the offtake or consumers’ demand.