Lithium On My Radar

Hey Influence Traders,

The push for electric vehicles has moved into high gear … or high voltage as the case may be.

President Biden announced, through a non-binding executive order, that he wants half of new cars sold in the US by 2030 to be all-electric, plug-in hybrid, or hydrogen-powered.

Simultaneously, the EPA proposed tougher fuel-efficiency standards for automakers.

Biden has received buy-in from the industry. Despite reports that the industry will spend $330 billion on electrification by 2025, the CEOs of the three largest US automakers were on hand for the announcement. 

They pledged to make electric vehicle sales 40%–50% of their total by 2030.

One condition – they want the government to provide a nationwide charging network.

Lithium Back on the Screen

The accelerating push for electric vehicles is putting renewed emphasis on lithium production.

Albemarle Corp. (Ticker: ALB) is at the top of my screen.

Labor issues in Australia have caused some production delays and cost increases, but ALB’s CEO said those issues will not stop their expansion in lithium mining.

Rather, with the lithium supply tightening and prices surging, producers are starting to ramp up.

Global lithium demand is projected to see a 5x rise.

ALB, which is the world's largest lithium producer, exceeded recent quarterly profit expectations.

The company reported second-quarter net income of $424.6 million ($3.62 per share) compared to $85.6 million (80 cents per share) a year ago.

Lithium Americas (Ticker: LAC) is also on my screen, but in a more wait-and-see mode.

LAC is developing projects in Argentina and Nevada.

Its Nevada project has passed a key Feasibility Study, it is building a chemical conversion plant, and it is moving to create partnerships to de-risk the project.

Its Argentine project is also moving forward with first production anticipated by mid-2022.

LAC declared a higher net loss in Q2 2021 compared to Q2 2020 due to the expansion of these projects.

They appear to be on track which is why we are watching them closely as the administration pushes forward on production needs.

Cutting Through the Noise for You.

Frank


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