April 15, 2016
Cheap Lithium-ion Batteries for EVs vs. The Cobalt Cliff
Publisher: Investor Intel
Author: John Petersen
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -
- April 15, 2016Cheap Lithium-ion Batteries for EVs vs. The Cobalt Cliff
Since early March I've written five articles that focus on supply and demand dynamics in the cobalt mining sector and explain why I believe the lithium-ion battery industry is facing a raw materials shortage of epic proportions. Today I'll drill down into market dynamics within the lithium-ion battery industry and explain why I believe cheap lithium-ion batteries for electric vehicles (EVs) will be the first casualties of the Cobalt Cliff.
I want to begin with an explanation that I've derived most of the numbers in this article by digitizing graphs from Avicenne Energy's presentation at AABC 2016 in Mainz, Germany, a process that's inherently imprecise. While I believe my estimates are close enough to offer a good overview, digitization is dependent on the visual acuity of the human being running the software and like most humans I'm imperfect on my best days.
Based on a careful analysis of Avicenne's graphs I've estimated that in 2015 the lithium-ion battery industry manufactured cells with 61,500 MWh of capacity and generated $17.2 billion in revenue, which works out to an industry-wide average revenue of $280 per kWh at the cell level. Total battery sales to automakers were roughly 15,000 MWh and total revenue from those sales was roughly $5.4 billion, which works out to an average revenue of $360 per kWh. That average will seem high to readers who are accustomed to an endless stream of EV hucksters' happy-talk about $150 per kWh batteries, but it's pretty accurate when you factor in the more costly cells used in PHEVs and HEVs.
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News Release:April 12th, 2016, Ecclestone on the "very big" cobalt niche
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News Release:May 2nd, 2016, Farquharson confirms coming cobalt deficit, outlines Formation's mine timeline