The Lithium Mine Buildup Is Outpacing the Electric-Car Boom

Industrial battery will eat it.

I would've been very excited about this back in the halcyon days of being able to carry spare batteries for my phone and laptop.

You actually. They are just external.

The electric car boom is in such early days now, I don’t know that anyone can even discern the shape of the curve yet.

The electric car industry hasn't remotely boomed. Electric cars are still deeply strangled by two key factors: industry inertia and the cost/supply of lithium batteries. Once those two factors are solved (and a build-up of lithium mines is key to that) electric cars will go from being a niche within a niche to utterly dominating the market very, very quickly.

Within the next decade we might see companies like Hyundai/Kia, Toyota and Honda selling more EVs than ICE. Take the Kia Niro EV as an example: if the cost of batteries halved and the supply was unconstrained, there is little stopping that kind of product from dominating the market—starting with two-car households with off-street parking.

With their lithium cell investments, Telsa are well positioned to benefit from this boom, but they need to think carefully about their positioning. Right now they're a luxury brand with no serious competitors; when Telsa's drivetrain advantage is substantially neutralised, their mind share is likely to stagnate.

In my opinion Tesla needs to prepare to be in the budget space. They need to partner with an external manufacturer to sell a product with normal door handles that competes with Hyundai and Toyota. Because once the cost of batteries falls, I predict a substantial slice of their market will simply disappear to the economy manufacturers. I suspect that many people who love Telsa really just love the idea of electric vehicles and they'll be buying something more like the Kia Niro EV.