Lithium Bulls Set to Run... Again!

So much for the people that missed the first lithium run gloating about the lithium bubble popping a few months ago. 

Benchmark Minerals – the leading research firm on critical metals in my opinion – just published a report citing that the battery industry needs to invest at least $514 billion across the whole supply chain to meet expected demand in 2030 and $920 billion by 2035.

It goes on to say that producing the critical raw materials will require $220 billion (43% of the total) with nickel and lithium accounting for over half of that. 

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Benchmark believes that lithium, more than any other part of the supply chain, will be the bottleneck for the growth of the battery industry. So while every “catch the trend” company positions itself as a part of the battery supply chain solution, there will be clear winners in the critical metals space both in terms of commodities and real companies doing real work to help meet that supply.

Lithium Bulls Set to Run… Again!

The aforementioned hilariously (unless you’re a U.S. taxpayer which I am) Inflation Reduction Act (IRA) has been very, very effective at incentivizing battery metals projects in North America, and that’s a trend that will continue.

It’s also – in my belief – affecting how other countries, most notably China, are approaching this next part of the cycle.

On Wednesday, China announced a $72.3 billion tax break for buyers of electric vehicles. This is the largest incentive amount to date.

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China is the world’s biggest electric car market, accounting for 60% of global EV sales last year. But a recent lag in sales and the IRA has pushed China towards a broader incentive package.

The IRA has also helped make the U.S. the second biggest EV market behind China with a nearly 80% year-over-year increase in the first quarter of this year.

Despite that, EV's still only account for 7% of sales here in the U.S.

We’re going to need more lithium, we’re going to need more nickel… and me and my subscribers are going to continue to make more money off that trend.

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle