Download now: Cannabis Cash

Big Crash in Hoverboards

Posted October 26, 2015

So the IT geeks in our office got one of these new hoverboard things. It's powered by batteries and goes six miles an hour. You ride it like a sideways skateboard.

Here is a picture of some random celebrity riding one:

hov111

Anyway, I'm doing laps around the office in the penthouse here in Baltimore when Keith Kohl pushes his chair out to stand up. I can't turn in time and face plant over the top of his black rolling office chair.

Arms, legs, hoverboard, and chair go flying in a big cartoon-like mass of swirling velocity.

He looks down at me, scratches his beard, and says: “Lithium.”

Battery Bike

A few days later, I'm looking for some way to get my stepson back and forth to school so that the wife and I can skip this daily chore. The school is four miles away, there is no bus, and it is straight uphill.

A bike ride is out of the question because a 15-year-old boy can't be sweaty unless it is in situations sanctioned by his interpretation of what 15-year-old girls think.

The obvious solution is an electric bike. They are like normal bikes with a small motor and a battery pack. They can go 20 mph, have a range up to 30 miles, and you don't need a license to ride one — unlike a gas-powered moped.

They cost anywhere from $500 to $5,000. Here is a picture of Captain Kirk riding one:

hov222

And that's where things get weird. When you start to think about all the things that could be run with batteries instead of internal combustion engines, you can imagine a very long list.

Here is a lithium-powered snow blower. I couldn't find a celebrity for this one for some strange reason.

hov333

If you look at the big picture, you can imagine a world where lithium starts to replace oil not just as a source of energy but also in terms of geopolitical power. Goodbye OPEC, hello CAB. Some 70% of all lithium is now mined in Chile, Argentina, and Bolivia.

There is a constant and growing demand for lithium as far out as one cares to speculate. Lithium use, production, and price are all going up rapidly.

PBS Newshour reports:

Unsurprisingly, with the proliferation of consumer electronics, global lithium production has been growing at a rapid clip, doubling in the decade leading up to 2012. Some expect the amount of lithium used in batteries could quadruple by 2020.

And 2014 was also the first year in which over 30 percent of annual lithium output was directed toward consumer battery production. The price for a ton of lithium has tripled to $6,500 over the last ten years, even as the price of lithium batteries has fallen every year since 2007 by almost 15 percent.  Were it not for consistent innovation, I suspect lithium prices would have risen higher faster.

Obviously, the market goes well beyond toys. Tesla Motors is building a “Gigafactory” in Nevada, which will produce 500,000 vehicles per year by 2020. This one factory will suck up 17% of lithium output for a year.

Tesla isn't alone. Warren Buffett's Chinese car company Build Your Dreams will also demand an equal amount of lithium — if not more.

All the best,

Christian DeHaemer Signature

Christian DeHaemer

follow basic@TheDailyHammer on Twitter

Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor's page.

Hydrogen Fuel Cells: The Downfall of Tesla?