Tesla lands biggest-ever order; how will things change for lithium players

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Tesla lands biggest-ever order; how will things change for lithium players

EVs, Li stocks, PLL, PLS, CXO, ORE, LTR, VUL
Image source: Copyright © 2021 Kalkine Media

Highlights

  • Tesla’s market cap hit US$1 trillion on Monday after the electric carmaker bagged its biggest-ever order.
  • Hertz Global Holding has placed the order for Tesla Model 3, which will be delivered in the next 14 months.
  • The growing popularity of EVs offers bright opportunities for lithium players.
  • Many ASX-listed lithium players have delivered significant returns in the last one year.

In what comes as a major boost to the EV industry, Tesla has received its biggest-ever order for 100,000 units of Model 3. Hertz Global Holding Inc., a rental car company, has placed the massive order with Tesla.

The order, valued at around US$4.2 billion, is expected to be completed in the next 14 months.

Tesla’s market cap crosses US$1 trillion for the first time

As soon as the news broke out on the Wall Street, investors and traders rushed to buy the shares of Tesla.

The shares rose 13% during the intraday trade on 25 October, and the Company’s market capitalisation crossed the US$1 trillion mark, a feat which has been achieved by a handful of corporations.

Hertz also gained 10% on the back of the news.

Related read: Tesla’s market value surpasses US$1 Tr on Hertz EV orders

EVs, Li stocks, PLL, PLS, CXO, ORE, LTR, VUL

Image source: © Ifeelstock | Megapixl.com

Lithium players hold the aces

As the popularity of EVs is growing, the demand for lithium is also on the rise. The lithium prices have already doubled this year.

Automakers and Li-battery manufacturers are rushing to secure the supply of lithium as the prices may go north with strong market sentiments expected for electric vehicles in days to come.

Related read: A look at Tesla’s Journey in 2021 and beyond

Australia, which holds one of the world’s largest lithium resources, accounts for around 50% of the lithium export market.

Let us flick through some of lithium stocks listed on the ASX amidst the current buoyant market conditions.

Piedmont Lithium Inc. (ASX:PLL)

Piedmont Lithium operates lithium assets in North Carolina, the US. The Company has set a target to produce 160,000 tonnes of spodumene concentrate annually to extract 22,700 tonnes of battery-grade lithium hydroxide.

Recently, PLL announced an updated mineral resource estimate for its project at around 44.2Mt @ 1.08% Li2O.

Shares of PLL gained 10% during the early hours of trading on 26 October.

Related read: Piedmont (ASX:PLL) ups resource at Carolina Lithium project

Pilbara Minerals Limited (ASX:PLS)

Pilbara Minerals has finalised a joint venture with South Korean conglomerate POSCO for setting up a downstream lithium chemicals facility in Gwangyang, South Korea. The proposed plant will have a capacity of 43ktpa of battery-grade lithium hydroxide.

Pilbara Minerals operates one of the world’s largest hard-rock lithium projects in Western Australia. The Company extracts spodumene and tantalite concentrate.

Related read: Here’s why Pilbara Minerals’ shares are in trading halt

Orocobre Limited (ASX:ORE)

Orocobre Limited extracts spodumene concentrates from its brine resources in Argentina. During the September 2021 quarter, the Company shipped 89,640 dmt of spodumene concentrate with a realised average price of US$779/tonne.

The Company is advancing well with contracting arrangements for further shipments during the December 2021 quarter and March 2022 quarter at an average price of US$1,650/tonne, nearly double from the price in September quarter.

Related read: Orocobre and Galaxy Resources’ merger set to create a lithium giant

Orocobre’s Naraha Plant in Japan is reaching its final stage of completion, and pre-commissioning works are underway. The plant will produce battery-grade lithium hydroxide.

Liontown Resources Limited (ASX:LTR)

Liontown Resources operates two lithium projects in WA, the Kathleen Valley and Buldania lithium projects. The flagship Kathleen Valley Project has an estimated mineral resource of 139Mt @ 1.3% Li2O and 140 ppm Ta2O5. The Buldania Project holds a mineral resource of 14.9Mt @ 1% Li2O.

Apart from the lithium projects, the Company also operates one nickel and one vanadium project in Australia.

Related read: Why is Liontown Resources (ASX:LTR) drawing investor attention?  

Core Lithium Limited (ASX:CXO)

Core Lithium operates the Finniss Lithium Project in the Northern Territory of Australia. The Company recently commenced construction works on the project after completing the FID last month.

Site construction is well underway, and mining activity is planned later this year.

Core Lithium expects the first production from the project in Q4 of 2022.

Related read: Here’s why Core Lithium (ASX:CXO) should be on investors' radar

Vulcan Energy Resources Limited (ASX:VUL)

Vulcan Energy recently signed a series of agreements to push its lithium project to the next level. The latest agreement with Polish battery material producer Umicore is for the supply of lithium hydroxide.

Vulcan has already executed an offtake agreement with German car manufacturer Renault Group.

The Company aspires to become the first lithium producer with net-zero carbon emissions in the world.

Related read: Vulcan hits a key milestone, produces its first battery-quality lithium product

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