Lithium battery makers capacity is forecasted to grow threefold from 175 gigawatt hours to 630GwH by 2022. Bloomberg analysts’ eyes world’s lithium battery making capacity to increase more than three times of its current capacity in next 4 years.
“That’s a fact not a forecast” stated Bloomberg New Energy Finance analyst Logan Goldie-Scot in Perth conference. He added that outlook on production capacity growth of lithium battery has been determined on the basis of recent announcements by battery manufacturers on the size of their new plants and the timing for it to commission.
As per the market researchers, the advancement in capacity is to be driven significantly by expected growth in electric vehicle sales. Bloomberg’s global long-term Electric Vehicle Outlook (EVO) forecasts sales of electric vehicle to increase from a record 1.1 million worldwide in 2017, to 11 million in 2025. It predicts that China will lead this transition to electric vehicle phase with sales accounting to almost 50% of the world’s EV market in 2025.
Bloomberg further anticipates that after 2025 the cost to manufacture electric vehicle will become cheaper than internal combustion engine cars which can then push the sales growth to 30 million in 2030.
The fall in prices would be led by the change in battery chemistries said Mr. Goldie-Scot. He told that it is because the batteries for electric vehicle will contain higher nickel and lower high costing cobalt. However, these new Nickel-rich batteries are said to be in the testing phase which can take more time to get completed.
It was understood that the current technology NMC 111 batteries uses equal ratio of cobalt, nickel and manganese the demand for which is drifting lower due to high cost of cobalt component which can be avoided in the new Nickel-rich 811 batteries. The new NMC 811 batteries will be made up of 8 parts of nickel and 1-part of cobalt and 1-part of manganese. This means that with the reduced portion of cobalt, the total cost of batteries will come down. Mr. Scot said as battery prices will decline, new markets will open up.
Despite a move of lower cobalt chemistries, Bloomberg eyes increase in cobalt demand which would tightens the market due to insufficient cobalt supply. Whereas in the lithium market the supply shortage is not expected to occur in the medium term.
Mr. Goldie-Scot stated that market has been used to the demand pull and the ability of battery producers, specifically lithium and cobalt, to meet up the demand. He concluded that battery demand will continue to surge over the next decade and beyond.
In today’s trading, ASX listed lithium stock Galaxy Resources Limited (ASX: GXY) was down by 2.682% to $2.540, Pilbara Minerals Limited (ASX: PLS) was up by 1.212% to $0.835, Orocobre Limited (ASX: ORE) slipped by 1.891% to $4.150, and Altura Mining Limited (ASX: AJM) declined by 2% to last trade at $0.245.
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