Another day, another tweet from Elon Musk. This tweet, however, may bode well for lithium miners, particularly in the European market.
Elon Musk Tweets Interest in Lithium Mining
Elon Musk tweeted Tesla may get into the lithium mining and refining business directly and at scale because the cost of the metal, a key component in manufacturing batteries, have gotten so high. “Price of lithium has gone to insane levels,” Musk tweeted.
Investors should remember that two years ago, Tesla secured its own rights to mine lithium in Nevada after failing to solidify a deal to buy a lithium mining company, according to Fortune Magazine.
Lithium deposits are not uncommon in the US, but refining resources are limited. Most production today takes place in Australia and Chile.
Global shipping, through the pandemic, has shown to be another sticking point in the supply of critical materials for EVs. In many industries, corporations have investigated localizing their supply chains and with Europe’s growing demand in electric vehicles, a Europe based supplier of raw lithium may find itself seeing greater interest from manufacturers serving the EU market.
Europe is Turning to EVs… and a Local Lithium Supplier may be Necessary
Over the past year, EVs have continued to grow their market share in Europe.
As the overall car market continued to decline – up 22% year-on-year (YoY) in December 2021 – the electric passenger car market in Europe recorded a near-record month, with 280,200 registrations. That number nearly topped 281,000 sign-ups in December 2020, magnified by the CO2 mandatory craze.
These impressive results, coupled with a sharp decline in the overall market, drove December’s plug-in vehicle market share to a record 29%. The percentage of all-electric vehicles (BEV) is 19%. The 2021 figure tops sales of 2 million plug-in vehicles, with the 2021 BEV market share ending at 19% (BEV alone is 10%). This is a significant difference from the 11% in 2020 and far from the 3.6% in 2019. I think we can expect the plugin market share of 2022 to end up above 25%. (30%?) And with the plugin market further merging with the mainstream, we’ve seen some interesting developments around the world. For example, in 2021, the two fastest growing European auto markets are Iceland (+36%) and Norway (+25%), which happen to be the two markets with the highest plugin market share on the continent.
Elon Musk would be wise to consider Tesla’s supply chain in Europe, given that Teslas have been some the best sellers of EV.
Investors should pay attention to United Lithium Corp.’s Finland based Kietyönmäki project
United Lithium Corp. (CSE: ULTH) is an exploration & development company focused on the exploration and development of lithium properties in Finland, Sweden and Canada. The Company states that its strategy is “targeting lithium projects in politically safe jurisdictions with advanced infrastructure that allows for rapid and cost-effective exploration, development and production opportunities.”
From the Company’s website, its projects include the newly acquired Kietyönmäki project in Finland, the Bergby Project in Sweden and the Barbara Lake project near Thunder Bay Ontario.
Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.