GREY:NMKEF - Post by User
Post by
road2rowon Feb 18, 2020 10:45pm
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Post# 30706100
Conspiracy theory
Conspiracy theoryOk - so here's my conspriracy theory on what has happened to the Lithium markets
1) 2017/2018 the big 3 car companies try everything to beat down the electric car market. Sure they have their own token electric cars - but its the gas guzzlers that are the bread and butter for the forseeable future.
2) The big 3/working with Merrill Lynch in July 2018 release a study claiming there will be an oversupply of litium - by 150% of estimates. The study claims the demand for electric cars will not be that significant in the foreseeable future
3) Analysts following the lithium market (ie Matt Bohlsen - seeking alpha to name one) call this study a real head-scratcher giving the market demand coming out of - not only Tesla - but a number of european car companies who have announced plans to convert production to electric vehicles
4) Dispite the market forecast, the impact of the Merrill Lynch report begins to have an effect on lithium pricing - including a steep decline for NMX - and the market as a whole as prices begin to plummet. As of Jan 2019 - most lithium companies have averaged a 40% loss in stock price.
5) With that loss - junior minors which would have helped with regional Lithium shortfalls over the next few years have lost too much to recover - ie NMX one of the most promising mines in North America - files for bankrupcy
6) With only the few remaining large Lithium producers remaining, demand for electric cars have accelerated as predicted and within the next few years, the shortfall is realized.
7) Since there is now a supply shortage, lithium prices begin to increase substantially causing the electric cars to become way too expensive. Even in the insuing years when prices began to fall on production of electric vehicles - the lithium shortfall now cause vehicle prices to rise well above their gas counterparts.
8) Because the time to spin up a new lithium mine is so long and costly, it will be years before electric cars see any reprive in pricing - causing electric car companies to rethink strategy and perhaps go back to hybrid production (or go broke).
That leaves the gas guzzling big 3 car companies in a great position to continue production and profits over the long haul. So dump your Tesla stock while you have a chance and take another look at Ford, GM and Chrysler.