BYD Would Like To Secure Lithium Access As Lithium Carbonate Prices Surges

2 years ago by Mark Kane 56

BYD Qin EV300

BYD Newest Plug-in, The All-Electric Qin EV300  (with 48 kWh battery, and up to 186 miles* of range)

BYD plug-in hybrid vehicles Qin and Tang

BYD plug-in hybrid vehicles Qin and Tang

BYD, which tempts investors with its projections of 150,000 plug-in electric car sales THIS YEAR (compared to less than 60,000 in 2015), needs to watch the lithium market very closely, as the company has taken over the usage lead for the resource in 2016.

According to Bloomberg, the prices of lithium carbonate tripled in China over last year, and is still going up this year thanks to the strong demand from companies such as BYD.

And for BYD, that’s bad news, especially as the Chinese company not only uses lithium-ion batteries, but also produces lithium-ion batteries. Typically, battery packs for pure electric car consist of around 5-15 lbs of lithium (depending on pack size).

As a result, BYD will try to expand its business into mining and/or acquire some mining deposits themself. Another option of course is to improve battery chemistry to store more energy using less of the raw material, or to displace with lower cost resources.

“BYD Co., China’s largest electric car and bus manufacturer, plans to obtain supplies of lithium to guard against spiraling costs of the raw material used in vehicle batteries, amid rising pressure on automakers to lower prices.”

“BYD declined to provide details on how it plans to secure access to lithium supplies. Chairman Wang Chuanfu this week forecast the company may sell as many as 150,000 new-energy vehicles this year, compared with the 58,000 it delivered in 2015.

The company is also China’s biggest producer of lithium-iron phosphate batteries, which go into models such as the Tang and Qin sport utility vehicles. In 2011, BYD bought an 18 percent stake in Zhabuye Lithium, a lithium and boron mining company in Tibet, for 202 million yuan ($31 million).”

source: Bloomberg

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56 responses to "BYD Would Like To Secure Lithium Access As Lithium Carbonate Prices Surges"

  1. scott franco (No M3 FAUX GRILL!) says:

    The production of Lithium is taking off:

    https://en.wikipedia.org/wiki/Lithium#/media/File:Lithium_world_production.svg

  2. Mister G says:

    Not good news for EV pricing.

    1. georges says:

      at 15 lbs for a large EV (60kwh assumed) (article) and 7500$/ton for Li carbonate I’m getting 93 cents of Li carbonate per kwh. If batteries are 145$/kwh then Li is less than 1% of the total battery price.

      Yes? anyone else crank the numbers?….was it in the article and I missed it?

      1. RexxSee says:

        A new good ol’ capitalist cartel?

      2. Pushmi-Pullyu says:

        I didn’t do any math, but I already knew that lithium carbonate is priced by the ton, not the pound. Tripling the price sounds alarming, but it won’t actually have a noticeable impact on the price of batteries or EVs.

        This is unfortunately the sort of alarmism that is all too typical of articles aimed at investors pumping their commodities or stocks. Bloomberg is certainly a more reliable source than, say, Seeking Alpha, but sadly it’s still not uncommon to see that sort of cowflop there.

  3. scott franco (No M3 FAUX GRILL!) says:

    Bolivia’s relationship with China has become much closer in 2015. On July 3, the Chinese ambassador to Bolivia, Wu Yuanshan, advised that the number of companies from his homeland was multiplying and that his government exercised “direct and indirect” controls over them. More than 35 Chinese enterprises have been attracted to Bolivia by infrastructure projects and natural resources like gas and iron.

    According to GNRE’s records, 86 delegations from 15 countries visited the lithium carbonate plant; 28 from Germany and 12 from China.

    1. Speculawyer says:

      Damn. They have a nice supply in Bolivia. Tesla should have been schmoozing with them.

      Perhaps he’s pinning hopes on Nevada Lithium.

      1. scott franco (No M3 FAUX GRILL!) says:

        True, but communist Bolivia (oh, excuse me socialist) has dragged far behind Chile in Li production even though their deposits of the metal are far smaller.

        1. Unplugged says:

          I believe you do a disservice to communism and socialism by categorizing Bolivia as either. Bolivia has had 190 revolutions and coups since it became independent in 1825. The most recent constitution was ratified by 60 percent of the population in 2009.

          The Bolivian government may be termed chaotic and bizarre, but it certainly appears to be largely democratic.

          1. MDEV says:

            You right Bolivia government is call Chavismo for Hugo Chavez style is not a communist country is a dictatorship with elections for the international community to accept them. Better look to Chile.

          2. Rob Stark says:

            Same way the Soviet Union was democratic.

            The Soviet Union had non-government sanctioned prostitution and drug sales so I guess it was not “true communism” but a mixed economy.

            Social Democracy if you will.

            Or the Way Saddam Hussein won “elections” with 96% of the vote.

            Or the way the PRI controlled Mexico between 1929-2000 with roughly “60% of the Vote.”

            1. przemo_li says:

              Or how we poles can be “proud” of PRL constitution given to us by Soviets, that guaranteed even better rights then those on so called democratic west at the time…

        2. floydboy says:

          No communists. True communism is practiced by no large modern society that I know of. All have a socialist/capitalist mix of varying degrees.
          The use of the word as a catch all, particularly by the American right, merely represents the laziness to which the political dialogue had devolved, especially during the social upheavals post WWII.

          1. Speculawyer says:

            Perhaps North Korea and Cuba.

            But in general, communism is dead, dead, dead. I find it so weird when people are calling whoever a communist. Jeez, get with the times. The cold war ended decades ago.

            1. SparkEV says:

              North Korea call themselves “socialist-communist”, but they emphasize more on being socialist. What’s funny is that we have a presidential candidate who use the same term to describe his policies as North Korea. Thankfully, that lunatic won’t get the job. I never thought I’d thank Hillary for anything until he showed up.

              There’s a good documentary series called “commandinig height” on PBS and part of it deal with Bolivia and how Milton Friedman helped. It’s too bad they went back to their socialist ways.

          2. Fool Cells says:

            are you really insinuating communism can be good? Communism is terrible and has failed everywhere it has been tried.

            1. przemo_li says:

              There are many “Democracies”, out there. Its just that “Communism” create much better opportunity for totalitarianism, thus it was always just facade for such a system. Better still as it had oppression as its one of main postulates…

              Thus weather communism is good, or bad is not the question. Communism was never introduced. Totalitarianism was.

              1. mr. M says:

                +1. finally someone understanding communism.

                Communism means at the basic principle that everyone is used where he is best at, that work is equally paid and that production goods dont belong to single people but the community as whole.

                And by equally paid i mean the same ammount regardless of the job. Since everyone is needed and precious, everyone should be paid the same amount of money.

                The problem with comunism is always that it is hard to find a common opinion what should be done. And usually after a while it ends in a dictatorship.

  4. scott franco (No M3 FAUX GRILL!) says:

    A good read is the book “bottled lighting”, although it is a bit dated. It described Bolivians working the salt flat with shovels.

    The Lithium industry stands to transform Boliva, and of course some think not for the better.

    1. scott franco (No M3 FAUX GRILL!) says:

      A good read on the environmental impact of Bolivian development can be found here.

      Bolivia is heavily socialist, which usually results in an environmental disaster, since the “official” regulations are often bypassed using bribes. It will be interesting to watch (and undoubtedly blamed on evil capitalists somehow).

      Now is your chance! Boycott Tesla and other EV makers on environmental grounds!

      No? Yea, didn’t think so…

      1. Speculawyer says:

        Pfft. Lithium mining is one of the lowest impact mining types around. There is a cost to everything but the reduction in damages from oil spills, refinery emissions, shipping oil with bunker fuel burning tankers far outweighs the minor issues of lithium mining.

        They’ll probably have to build more roads, improve the ports, build some lithium processing facilities. But the main act of lithium mining is just scooping up the ground from dried sale lake beds.

        You have to look at the totality of the issues. I can’t stand it when far right people say “Wind turbines kill birds! hurr hurr” or far left people say “You can’t install that solar facility in the desert! You can’t damn that river!” (in comparison to the damage from coal mining & burning).

        There are trade-offs to everything.

        1. Pushmi-Pullyu says:

          Indeed, and well said. Whining about supposed “environmental damage” from scooping up salt from a dry lake bed sounds like Big Oil propaganda intended to distract from all the environmental damage from fracking, oil well leaks, and oil pipeline leaks.

      2. Pushmi-Pullyu says:

        scott franco said:

        “Bolivia is heavily socialist, which usually results in an environmental disaster, since the ‘official’ regulations are often bypassed using bribes.

        Gosh, I’m sure this will come as a great surprise to citizens of such heavily socialist countries as Finland, Netherlands, Canada, Sweden, and Norway. Apparently the widespread environmental disasters in such countries from ignoring regulations has consistently failed to make the news? [/snark]

        Scott, I usually enjoy your posts, but here you’re just parroting the talking points of the great Hard Right bubble world, ignoring facts and reality rather firmly.

        The problem with Bolivia and other Central/South American countries is the everyday corruption so heavily entrenched in their culture, not how much or how little socialism their economic systems have. Corruption is every bit as possible in a capitalist system — just look at how much lobbying influence (that’s a euphemism for “bribery”) there is in the U.S. Congress. Not to mention how much the environmental damage from fracking in the U.S. is simply ignored.

        1. scott franco (No M3 FAUX GRILL!) says:

          Yes, there are different brands of Socialst. For example France is fairly socialist but is still an industrial power.

          In Latin america, fortunately or unfortunately, prosperity has risen and fallen with socialism. Argentina reverted to being a basket case following a long business friendly phase. Venezuela was a going concern and would have remained so if Chavez had not replaced the successful managers of the oil boom with his cronies, who knew nothing of oil. I understand from our Venezuelan friends that the government is mostly run by Cubans now. There are many others, Correa’s Ecuador, Bolivia, etc. Brazil had a good run despite having a series of socialist presidents, but the temptation of handling out (and pocketing) all that cash got to be too much, and now Rousseff is headed for the trash can.

          Contrast that with Costa Rica, Mexico (of late, doing well despite the drug war), and our home country of Colombia, which having rid itself of the drug cartels is headed firmly for the middle class.

        2. scott franco (No M3 FAUX GRILL!) says:

          “The problem with Bolivia and other Central/South American countries is the everyday corruption so heavily entrenched in their culture, not how much or how little socialism their economic systems have. Corruption is every bit as possible in a capitalist system — just look at how much lobbying influence (that’s a euphemism for “bribery”) there is in the U.S. Congress. Not to mention how much the environmental damage from fracking in the U.S. is simply ignored.”

          What you are describing is “crony capitalism”, and usually has its roots in formerly socialist states. Pure socialism is an unstable element and usually decays to crony capitalism when the governments imposing it realize they are going to starve to death without capitalism (see for example China, which is socialist in name only).

          With respect to fraccing, most of the charges have been made up or exaggerated. For example the New York ban was largely sold on the idea that New York city’s water supply was at risk, even though the vast majority of it is surface water (dams) and that is completely unaffected by ground water issues.

          But I would not argue fraccing is superclean, it needs to be regulated, and Obamas turn from deepwater drilling to fraccing makes sense (which he did… do some reading) along with the increased regulation of existing fraccing. He also left it up to individual states to regulate, another good move.

          In main, if I might opine, oil drilling was and is a very dirty industry. Our days in the late 1800s and early 1900s as an oil production power were filled with incidents of environmental damage (but not as much as surface mining before it, there are vast tracts of permanent damage evident in California to this day).

          We essentially exported oil drilling and the environmental damage from it to other countries, so we gain the benefits of oil while around the world they get the damage (and the money).

          Now oil and gas have come home to the USA. We are both the biggest user of oil and gas as well as having the best and strictest standards for safely drilling it in the world. Is it perfectly clean? Of course not. Realize also that you are going to get different answers from the neighbor that abuts a drilling pad and got a cash payout for his/her trouble and the one who has not.

          At the end of the day, we now take in our dirty laundry as well as make it, and we keep the cash instead of sending it abroad. And we do a better job of it than any country on the planet.

          So sorry, I’m not sorry.

        3. Mikko says:

          As a citizen of Finland I can tell you that we haven’t ever been socialist and never will be. We fought three wars against socialists in 1918, 1939-40 and 1941-1944 and socialist failed to conquer and enslave us.

          YOU ARE HUGE IGNORANT ASSHOLE and you have insulted the whole nation by pissing on graves of finns that died defending their homeland from socialism.

          List of countries that have ever been socialist DOESN’T include Finland, Netherlands, Canada, Sweden, and Norway
          because we have NEVER been socialist.

          https://en.wikipedia.org/wiki/List_of_socialist_states

          You should know what socialism means before you insult nations with your ignorant nonsense.

          Socialism means that private enterprise is illegal. examples: Soviet union and China from 1949 to 1978. Private enterprise has NEVER been illegal in Finland, Netherlands, Canada, Sweden, and Norway.

          1. Pushmi-Pullyu says:

            Dude, strong language generally indicates a weak argument… and yours is an excellent example of that.

            Try Googling (Finland socialism) and look at just the first few links to see how wrong you are. No, Finland isn’t 100% socialist; neither is the USA 100% capitalist. That doesn’t stop most people from describing the U.S. as a “capitalist country”, nor Finland as “socialist”.

            Now, take a stress tab and chill out before you give yourself an aneurysm.

          2. SparkEV says:

            Incensed comments aside, Mikko has a point. While income distribution is higher than US in those countries, many of them are much easier in terms of regulations. One could say US is far more socialist, especially for business heavily taxed/regulated/controlled by the government.

            As such, those countries are not any more socialist than US or much of the world; they are just different. Put in same socialist camp as North Korea, that would piss me off, too.

        4. NoPlugNoSale says:

          The primary problem with socialists in America is that they believe it is a sin to dream of wealth. “Income equality” is their mantra – and take drastic steps to insure nobody is too prosperous, including companies.

          We oft hear this promise of free college, free healthcare and housing subsidies from government for all… This is supposedly paid for by taxing the successful; the employers; the risk-takers who became wealthy. Here is the rub: When pocket calculators come out and numbers are run, the wealthiest in our nation also pay the lion’s share of the taxes. They also employ the lion’s share of the people. So let’s punish them so they move somewhere else where there isn’t such a high tax burden.

          The next big flaw in this “socialist dream of income equality” is the big question: “Who are the rich?”. One socialist-leaning liberal will be seen on one cable channel “news” show stating that those earning over $1,000,000/yr are the “rich”, and should be taxed heavily. Flip the channel and another socialist pundit can be found stating those making over $275,000/yr are, “the rich”. Yet we know, as Americans, we in the shrinking middle class are the workers, the small business owners and the employers of another big chunk of this middle class. This is a middle class that most countries do not have. Why? Because of corruption by government who has taxed and worked diligently to make businesses and citizens dependent upon them. Each year, when budgets aren’t met and debt rises, their governments ask the citizenry to trust their new definition of who is rich. Soon – to provide the government handout parade, the actual middle class is taxed to the ceiling. It’s a declining spiral that has played out over the century in country after country. Governments getting more powerful and richer, the people getting more oppressed, controlled and taxed.

          We in the United States of America still have a middle class. It is eroding by the minute. By taxing the “rich” so the illegal immigrant can have a “working wage” – and crying foul when we attempt to protect our children by trusting ourselves and not our government – we are called, “haters” and, “the 1%” amongst other nasty things.

          This mantra works well on college campuses and downtrodden neighborhoods. These folks don’t have the life experience, education nor inclination to study world history to provide them some ammunition against such government manipulation. Whenever the left wants more votes, it pulls out the “hater” card: “You hate women!, unless you vote for us!” “You hate minorities, and the poor all over the world, unless you vote for us!”…

          I think the former president of France said it all when he told our current president that socialism seriously damaged France, and to not go down that road.

          When hosting people from developing countries, they see how the middle class in America lives and dreams to come here and be like us. Unfortunately, the paradox is the more that come here, the more they are manipulated into thinking the political left is on their side. They become slaves to government, thus shooting their dreams of becoming part of the American middle class to pieces.

          1. scott franco (No M3 FAUX GRILL!) says:

            A good post. Sadly, I believe you are right. The USA is swinging farther towards socialism than ever in my life (of more than half a century). This is said to be on account of the crash of 2008, even though this was equally caused by the Democrats push to “get everyone a house” as it was by wall street.

            The present playbook of the socialist left comes straight from Huey long, who would have highjacked Franklin Delanor Roosevelt’s administration if he had not eaten a bullet. The elements were all there: The rich are hoarding all the wealth, if we just passed out their wealth everyone would be rich, etc.

            Those who do not remember (study) history are doomed to repeat it.

        5. RexxSee says:

          Canada? Socialist?!? LOL!

          1. RexxSee says:

            To Scott Franco & NoPlugNoSale.
            How brainwashed can you be and how ignorant you are of socialism. Shame on you.

            There is good socialism and good capitalism. I can assure you that Chavez and Castro were caring for their people, and that the type of corporate cartels with their politic and media puppets are very bad for the world.

            1. scott franco (No M3 FAUX GRILL!) says:

              Absolutely. I am sure Castro is very good to what is left of the population.

              1. RexxSee says:

                60 years of blockade sir.

                1. RexxSee says:

                  You’re not aware on how subtle and effective the American propaganda is on is own citizens. Read some Edward Bernays or Noam Chomsky’s.

                2. Windbourne says:

                  You are kidding. Right?
                  First off, we have NOT blockaded Cuba since oct 1962. We have said no trade with them, but they have traded with just about every other nation on this planet.
                  IOW, America has NOT hurt Cuba 1 bit.
                  Their leaders have hurt cuba.
                  And that is why Cubans continue to leave their and swim for America.

          2. Pushmi-Pullyu says:

            Good grief! I had no idea that when I pulled a few names off a list I found online that it would set off a series of angry responses.

            I Googled [most socialist countries] and the #1 hit was this article: “Top 10 Most Socialist Countries in the World”.

            http://blog.peerform.com/top-ten-most-socialist-countries-in-the-world/

            Now, if y’all want to argue with whoever put together that article, go right ahead. I’ll step back and get out of the firing line.

            Y’all think that some (or even all) of the countries on that list aren’t “socialist countries”? Okay, you’re entitled to your opinion. But that’s all it is — your opinion, not fact. My opinion differs from yours. So does the opinion of a lot of very well informed people. If I’m wrong, then at least I’m in good company.

            And this is all very off-topic. The topic is lithium mining and how that might (or might not) affect production of li-ion batteries and plug-in EVs.

            1. Windbourne says:

              China does not belong on that list.
              They remain a totalitarian nation, and have very little socialism going on.

      3. SJC says:

        “..heavily socialist, which usually results in an environmental disaster…”

        That implies Demark, Sweden and other socialist countries are harming their environments, which I doubt.

        1. scott franco (No M3 FAUX GRILL!) says:

          http://www.investors.com/politics/capital-hill/denmark-tells-bernie-sanders-to-stop-calling-it-socialist/

          Ie., Denmark does not think of itself as socialist.

          1. Unplugged says:

            And I fail to see anything that suggests the population of Bolivia see themselves as socialists either. That label is what you apply to them.

            1. scott franco (No M3 FAUX GRILL!) says:

              You should start a campaign to correct the many press outlets who call Morales socialist, starting with Evo himself, who repeatedly refers to himself as socialist.

              https://en.wikipedia.org/wiki/Bolivia

              1. RexxSee says:

                Capitalist propaganda successfully convinced people that socialism = the devil himself!

            2. scott franco (No M3 FAUX GRILL!) says:

              El presidente de Bolivia, Evo Morales, recordó hoy en la Santa Sede a Jesucristo como “el primer socialista del mundo” y defendió la nacionalización aplicada en su país para acabar con la “política del saqueo” del neoliberalismo.

              “Estamos en la Santa Sede. El primer socialista del mundo ha sido Jesucristo”, señaló durante su intervención en un simposio en el Vaticano, en la que afirmó que no podía “estar con el capitalismo inhumano sino con el socialismo comunitario”.

              The president of Bolivia , Evo Morales , recalled today in the Holy See Jesus Christ as ” the first socialist world ” and defended the nationalization applied in your country to end the “politics of looting” of neoliberalism.

              “We are in the Holy See. The first socialist world was Jesus Christ ,” he said during his speech at a symposium at the Vatican, in which he said that he could not ” be with the inhuman capitalism but with communitarian socialism ” .

      4. Windbourne says:

        Boycott Tesla on environmental grounds?
        LOL.
        They are PURPOSELY avoiding nations like China and Bolivia, because of environmental reasons. Their lithium, in fact, all of their elements, come from vetted sources that are considered best of class.
        That does not mean that all of it will never do any environmental damage, but that it is considered to be what is best possible.

        Sadly, companies like BYD, and Apple, will be happy to get items from wherever it is cheapest, regardless of consequences.

  5. Anthony says:

    The price of Lithium and Model 3 pre-orders have sent my lithium stocks up a lot in the last few weeks. I wonder if it’ll stay up that high for a while.

    1. Speculawyer says:

      Yeah, I wonder if the huge success of the Model 3 launch and reservations are backfiring on Tesla!

      With 400,000 orders, no one knows how they’ll be able to manufacture all those cars. And those orders probably have pushed up the price of lithium.

      But on the other hand, this should bring in big investment into the lithium sector and other sectors needed to supply important materials and components for the Model 3. Demand will create a supply.

      1. Pushmi-Pullyu says:

        Yeah, it’s not like lithium resources are in short supply; it’s a fairly common element. However, with swiftly rising battery production there may be short-term lithium shortages as ramping up lithium production lags behind demand.

        What concerns me more, long term, is the amount of cobalt used in batteries. Unlike lithium, cobalt is fairly rare.

        1. Ambulator says:

          Crustal abundance: (https://en.wikipedia.org/wiki/Abundances_of_the_elements_%28data_page%29)

          Lithium 2.0 x 10^-5
          Cobalt 2.5 x 10^-5

          I think lithium is a little cheaper, though. It’s easier to mine.

          1. Pushmi-Pullyu says:

            Crustal abundance doesn’t tell the whole story. Equally important is how easy it is to find concentrations of the mineral or element, and how expensive it is to refine it.

            I’m no expert on the subject, but from what I’ve read, the cost of cobalt in li-ion batteries is substantially greater than cost of the lithium metal and the lithium ion electrolyte even put together. Basically, cobalt is the only raw material in batteries that is a significant fraction of the cost of the finished battery even before processing.

            Despite the name, “lithium ion” batteries don’t actually have that much lithium in them. As I recall, the Tesla Roadster’s (original) ~52 kWh, ~950 lb. battery pack contains only about 9 pounds of lithium.

            1. Ambulator says:

              Crustal abundance doesn’t tell you the whole story but it does tell you how rare an element is. You were wrong to claim that cobalt is rarer than lithium. Their cost is about the same. How much cobalt is used in NCA batteries compared to lithium is not easy to find on the Net.

              In the game Master of Magic spells could be common, uncommon, rare or very rare. In the same scheme I think both cobalt and lithium would qualify as uncommon.

  6. scott franco (No M3 FAUX GRILL!) says:

    Here’s a more recent article on the subject.

    http://www.laht.com/article.asp?ArticleId=327635&CategoryId=14919

    1. scott franco (No M3 FAUX GRILL!) says:

      The socialist president said the state “will never lose ownership of the lithium,” which, according to government estimates, is concentrated within a 15,000-sq. kilometer (5,791-sq. mile) expanse of the Uyuni Salt Flats in southwestern Bolivia.

      He said companies wishing to play a role in Bolivia’s lithium industry would have to accept the state’s “absolute control” over the metal and the principle that La Paz is entitled to 60 percent of the profits.

      Translation: we are waiting for a developer who passes out the biggest bribes…

      1. scott franco (No M3 FAUX GRILL!) says:

        And the standard corruption charges:

        http://www.cnn.com/2016/03/01/world/bolivia-morales-secret-relationship/

  7. scott franco (No M3 FAUX GRILL!) says:

    And the top Li producers:

    http://investingnews.com/daily/resource-investing/energy-investing/lithium-investing/2013-top-8-lithium-producing-countries/

    Surprise! Austrailia and Chile lead the list…

  8. Ian says:

    Illuminati confirmed…ha what’s happening to inside evs today. ?
    Free lithium for everyone…researching lithium mines and companies is so last year. This stuff should not be a surprise.