RE:RE:RE:RE:RE:RE:RE:RE:Winning From Higher Vanadium Priceskha341 wrote: Alternative solution?
9) Algar says if battery producers can lease vanadium, or secure its supply at “reasonable” prices, then it makes for very low costs per kWh over the asset life compared to lithium-ion
10) The important thing about the leasing model is that it is unaffected by fluctuating vanadium prices. And it allows the producer, battery maker, and financier all to benefit, says Algar.
#9 is a summary of my point "
lease vanadium, or secure its supply at “reasonable” prices" Remember this statement refers to new deals.
In the case of companies selling VRFB they need to recover the cost of V. Even for Largo if it wants to sell its VRFB it needs to get back the market price for V. Therefore, when V priceis too high no companywillbe able to sell.
In the case of companies leasing they should be able to lease their V at a reasonable price. I beleive the statement refers to battery companies that want to follow the leasing model and therefore need to lease V from companies like Largo tobe able to provide the batteries to the customers that need them. At this point these companies will pass the cost to the customer. If the priceis not reasonable they won't be able to sell/lease.
The same applies to Largo. If the lease does not have a reasonable price then it won't be able to generate
NEW leases
#10
The important thing about the leasing model is that it is unaffected by fluctuating vanadium prices
This refers to existing leases. New leases still have a dependency on market prices.
Since Largo is a producer of V and production costs are low. Largo could use periods of high V prices to gain market share but why wait 20 years to receive $30/lb if you canget it rght away?
In relation to alternatives:
- are you saying that V is the only solution?
VRBF could be the best type of batteriesout there but I do not think that thispositionwould not be challenged if the price is to high
Even with all the issues that Li ion batteries are facing, I do not believe that the producers of these batteries won't try to solve hese issues.
Look at the Cobalt story...
Also there is a lot of research being done in other battery technology with very promissing results
It will take Largo several years to start generating a meaningful revenue stream of income from the leasing model. Largo needs to pay toget there.