As mentioned in a previous post, TESLA's agreement with BCN is another strong indication that things are moving ahead in the lithium industry faster than expected. In addition, the key thing in this agreement is what few investors (or maybe NONE) noticed in TESLA's press release. I quote:


"This agreement will form a portion of Tesla's anticipated lithium-based feedstock needs; the remainder of which is expected to come from other lithiumpeers."


See also some more key excerpts for your investment decisions and make up your mind before it is too late:


"Rare Earth Minerals (REM.L) chairman David Lenigas said “The selection of the Sonora lithium project as one of the lithium suppliers to the Tesla Gigafactory is a landmark transaction.”


and this:


"Joe Lowry, a Lithium Industry analyst, reckons that the firm (TESLA) may have to fall back on Chinese producers that get the metal from ore rather than seawater. Lowry says that the exports from China “has not met the battery quality standard on a consistent basis.” Improving that quality is likely to increase “costs and impact the overall quality of the lithium ion cells produced at least in the short term,” he adds. This is what Mr. Lowry call Tesla Motors’ “Real China Problem.”

and this one:


In order to get around those risks, Tesla Motors will have to try its hand at hedging bets on the supply chain. Laslau of Lux says the firm will “have to lock up the supply and secure yourself against any strong variances in the price of these raw materials, because that could throw off your entire business". Part of keeping those risks low means not relying on one single supplier for any resource.



So a canny investor has to ask himself this weekend: Who will be the next supplier for TESLA's gigafactory? Once he asks himself this question, he has to move quickly and establish a position on his lithium pick(s). The earlier he does this, the lower price he will pay of course. You saw that BCN's price jumped 50% on Friday on the news about the deal with TESLA. It is more than certain that the word will be spread this weekend, more investors will get aware of this news and will make their dd on lithium and place their bets next week.

The key is that the other lithium producers Tianqi, ALB, SQM and FMC who control 89% of the world production do not have enough spare capacity for TESLA. This is why TESLA did not make a deal with them. They work at almost full capacity now.