The unveiling of Tesla's Model 3 electric car was no less than the lifting
of the final curtain on a game-changing energy revolution. And if we follow that
revolution to its core, we arrive at lithium -- our new gasoline for which
the feeding frenzy has only just begun.
Unveiled just on 31 March and already with 325,000 orders, it seems that
the market, too, understands that the Model 3 is more than just another
electric vehicle. In one week alone, Tesla has racked up around $14 billion
in implied future sales, making it the "biggest
one-week launch of any product ever." (And if you think the
"implied future sales" negates the news, think again: Each order
requires a $1,000
refundable deposit.)
It will change the world because it is the first hard indication that the
tech-driven energy revolution is not only pending, it's arrived. The Model 3
and its stunning one-week sales success -- apparently achieved without
advertising or paid endorsements--brings the electric car definitively into the
mainstream, and there is no turning back now. Competitors will step up their
game and the electric vehicle rush will be in full throttle -- so will the
war to stake out new lithium deposits.
If we reverse engineer the Model 3, we find lithium--the heart and soul of
the energy revolution. While everything else is suffering from low prices and
a supply glut, lithium is facing the over-charged demand, which opens a huge
window of opportunity for new producers.
The Model 3, all by itself, will have a huge impact on lithium demand,
which is already threatening to make supply impossible without exploration
and production of new resources. At the end of the day, Tesla's "huge
step towards a better future" achieved by fast-tracking "the
transition to sustainable transportation" comes down to lithium.
The lithium space is becoming a frantic game of who can get their hands on
the choicest new mining acreage and who can launch new production fastest.
And in North America, it's all going down in the state of Nevada, which is
the staging ground for a U.S. lithium boom that will feed the manufacturing
beasts for everything from EVs, battery gigafactories, powerwalls and energy
storage solutions to the long and growing list of consumer electronics that
we use every day.
It is no
less than a global scramble to secure new lithium supplies. Even before
Tesla unveiled the Model 3 to smashing success, Goldman Sachs was predicting
that for every 1% rise in EV market share, lithium demand would rise by
70,000 tons per year, and that overall, the lithium market could triple in
size by 2025 just on the back of electric vehicles.
To ensure the success of its electric vehicles, Tesla is building a
battery gigafactory just outside of Reno, Nevada, and it's hoping to have
enough lithium to make enough batteries to power 500,000 cars by 2020, according to
Fortune magazine. Logically, it's hoping to be able to source that
lithium from Nevada as well, and all the new entrants into the lithium space
are hungry to be put on Tesla's future supplier list. But first they have to
get it out of the ground.
All of this has made a previously dusty and unattractive area of Nevada --
Clayton Valley -- one of the most important and significant places in
America. But Clayton Valley may just be the beginning.
According to Malcolm
Bell, advisory board member and head of acquisitions for Nevada Energy Metals,
Nevada may have a lot of fault traps outside of Clayton Valley with potential
lithium deposits "hiding in plain sight".
"The lithium business is not a flash in the plan; it is here to stay,
and I am looking at it like the start of the oil boom in the U.S. when there
were oil rigs and derricks nearly every 50 feet," industry veteran Bell
told Oilprice.com. And Nevada Energy Metals understands that lithium is
exactly the mineral that is powering our future.
"Thanks to visionaries like Elon Musk, who has turned the
transportation industry on its ear, we have a new commodity that looks like
it is here to stay. I feel that a lot of people underestimate the green
energy movement and the role that Lithium plays in it."
The electric car is no longer elite. Now it's for the masses, and the
masses will need more lithium than we can currently get our hands on. It's a
wide-scale energy revolution that will end being -- in hindsight -- the first
nail in the coffin for fossil fuels and the heralding of a new era of lithium,
the "white petroleum".
