I recently sat down with Rodney Hooper of RK Equity to get an update on what’s happening in the EV battery market and EV battery mining world, including what’s happening with Tesla’s EV battery goals nearly a year after Tesla Battery Day.
Rodney started off by highlighting the huge EV sales boom this year (which we’ve been primarily seeing in Europe). The large, fast growth in the market is already putting a crunch on battery resource supplies, and we’re hardly getting rolling. The result is that OEMs and their battery suppliers are scrambling to get whatever minerals they can that will work to power new electric cars.
People are basically “playing Tetris with the battery cell design,” Rodney said. He added that we are at perhaps 5.2–6 million EV sales a year now, but that we are on our way to 40 million EVs in 2030. There’s a long way to go with a lot of growth that will require many more batteries and everything that goes into them.
Will OEMs/battery cell manufacturers pay the higher price of lithium that lithium miners require in order to get to work mining a lot more lithium? That’s the ongoing question. And it’s not about being greedy. These miners have fairly thin margins and don’t have unlimited cash to sink into major new resource projects.
“My thesis is: I keep hearing this talk about cheaper EVs — you know, the ‘Model 2’ and the this and the that. I don’t understand why any OEM, including Tesla, would cannibalize into their higher-margin, higher-value EVs when the lower EV market isn’t profitable.”
In the second part of our interview, I asked about Tesla Chairperson Robyn Denholm’s push for Australia to not only mine more EV battery minerals but also process them rather than leaving so much processing to China. Rodney explains why this is just not going to happen, though, with the overall point coming down to money, money, money.
For much more detail on the topics above and several more topics, jump into the podcasts via the SoundCloud players above or on whichever podcast network you are accustomed to (see below). Clearly, the short summary above doesn’t capture everything useful that was said in the 67 minutes of the two-part podcast interview.
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