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Investors Take Note: The Lithium Hangover Is Gone

Written by Keith Kohl
Posted October 2, 2018 at 8:00PM

Headlines can be misleading.

This isn’t news to most of you, especially in today’s world where clickbait has become standard operating procedure for the media.

The hard part is separating the wheat from the chaff in the digital merry-go-round world we are immersed in.

Sometimes it’s easy to do, sometimes not.

So earlier today, when an overly exuberant friend of mine passed along an article showing that more than half of Norway’s new car sales last year were either hybrid or fully electric, all I could do was shrug.

He was expecting a little more excitement on my part.

After all, approximately 60% of new passenger cars registered in Norway last month were either plug-in hybrids or all-electric.

The way he sounded, everyone on the planet was going to be behind the wheel of an electric vehicle next year.

Although I didn’t want to rain on his parade too much, it was only fair for me to give him a little perspective.

In 2017, there were slightly less than 160,000 new passenger car sales in Norway.

“That’s a drop in the bucket,” I advised.

Now, that isn’t to say my friend was wrong. My veteran readers know full well that my outlook for lithium remains strong.

Eventually, investors will come to grips with the fact that it’s impossible NOT to be a long-term bull on the EV revolution...

You just have to know the right places to look.

When I call Norway’s auto market a “drop in the bucket,” I mean it.

New passenger car sales in the United States last year totaled a jaw-dropping 17.25 million units.

In the China, it was 24.7 million!

If you want to see the EV transition really start to gain traction, then simply let China lead the way for you.

Last week, Ganfeng Lithium inked a five-year lithium supply deal with BMW.

But not only will Ganfeng sell as much lithium as BMW wants, it’ll sell it at market prices. Of course, this is right on the heels of another Ganfeng deal, except that was with another carmaker you might recognize: Tesla.

Some think tanks like GlobalData project that the global EV market will grow at a CAGR of 15.6% over the next four years.

For the record, that’s 3 million electric vehicles that’ll be zipping around silently on a road near you in the future.

And yet that’s just the tip of the investment iceberg.

Demand Will Drive Your Lithium Profits in 2019

Right now, there are more than three-dozen battery mega factories that are being built or are currently in operation.

And the demand figures are nothing short of extraordinary.

According to Benchmark Mineral Intelligence, these massive battery factories — think Tesla’s Gigafactory-1 — will require more than 800,000 tonnes of lithium per year.

Moreover, the batteries coming out of those new factories will be both cheaper and more efficient as investment continues to pour into them.

Personally, I think the Ganfeng deals are just the beginning.

In fact, I think we’re going to see more and more companies strike deals directly with lithium producers going forward.

So, is the lithium hangover gone?

After one helluva year in 2017, the lithium boom was tamed as prices declined sharply this year. The price drop was certainly enough to deter investors.

The pain may be gone soon, and brighter skies are ahead.

Keep in mind that virtually all EVs over the next 10 years will be powered by lithium-ion batteries.

Yet the companies desperately needed to supply those battery manufacturers tumbled right alongside lithium’s price decline.

That’s not a crisis, dear reader; it’s an opportunity.

More importantly, I want you to be a step ahead of the herd on this situation. I’ve put together this investment report that’ll help you get started and will even reveal three lithium players that you can buy today at a steep discount.

Don’t take my word for it, just check out all of the details right here.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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