Tesla’s Lithium Bet 🔋

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Happy weekend, Folks!

With the rise of electric vehicles — I’m a happy Tesla owner as of last year — and lithium batteries in general, the silvery metal has been dubbed “white gold.”

Massive government subsidies and a global push toward cleaner energy have turned what were once desolate salt flats into new gold mines.

Those once-worthless pieces of land in remote areas around the world are now at the very heart of our new mobile electrified world.

Global lithium consumption has nearly quadrupled since 2010, with The Guardian noting that “its global demand is predicted to rise more than fortyfold by 2040.”

What many don’t realize is that some 60 percent of the world’s known lithium reserves are in Latin America, specifically within the so-called “Lithium Triangle” in Chile, Bolivia, and Argentina.

To date, while Argentina is still the world’s fourth largest lithium producer — accounting for 10% of the global supply — it has paled next to its Chilean neighbor, which produced nearly five times as much in 2023.

That may all change — and soon. As CNBC noticed in October:

The article noted that Argentina “is thought to be on track to match — and potentially even surpass — neighboring Chile as Latin America’s leading lithium producer by 2030, with investors and operators from across the globe scrambling to get involved in its burgeoning ventures.”

One analyst told CNBC, “Argentina has infinite untapped resources when it comes to mining. We’re talking about a new Chile if not more.”

Later that month, the election of arch-capitalist and libertarian Javier Milei as president seemed to cement that trajectory.

In April, Elon Musk gave President Milei a tour of Tesla’s Austin, Texas, “Gigafactory,” after which Mr. Musk posted this picture with the caption “To an exciting & inspiring future!”

President Milei was trying to drum up investment for his country’s troubled economy, and he commented that “[Elon Musk] is extremely interested in our lithium and so is the government of the United States.”

The two met again a few weeks later in Los Angeles to discuss business matters, and President Milei’s circle has revealed that Tesla may even build a Gigafactory and an EV manufacturing plant in Argentina.

Late last month, Bloomberg reported that, while just one new lithium mine had come on stream in the past decade, “Four new projects will finally begin to churn out lithium in the weeks and months ahead.”

The new projects are expected to “ramp up annual capacity by 79%.”

If that pans out, Argentina could indeed rival Chile in overall production even without further development.

It’s an exciting time in the lithium space in Argentina, but there are some hurdles that will need to be overcome. 

I’ve been researching this story extensively lately. Tomorrow, I’ll share some of my thoughts and trade ideas on how to capitalize on this trend. Stay tuned…

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