- Government policy driving electric vehicle adoption
- A 100% increase in lithium price estimated to raise battery cost less than 1%
- Electric vehicle unit costs continue to fall as output rises
No one can be faulted for thinking that electric vehicles (EVs) will be a feature of the future. However, they were also a detail of the past. In the 1890s and early 1900s, EVs cruised the streets of America, particularly in the Northeast but also in Chicago. At the turn of the twentieth century, electric vehicles outnumbered their gasoline alternatives two to one in the major metropolitan areas of New York, Boston and Chicago. Powered by lead acid batteries, they increasingly lost market share to cars with internal combustion engines, which had longer ranges. Now, their time seems to have come again, and Americans are rediscovering EVs. As major automakers accelerate the launch of new EV models, they will be casting an eye at exploration companies like 92 Resources Corp. (TSX.V: NTY) (OTCQB: RGDCF) (FSE: R9G2), since this modern energy solutions company is mining the precious lithium that powers the batteries under the hood.
The latest report card for EVs shows how quickly American drivers are adopting plug-ins. For October 2017, EV sales were up 50% (to 16,000), as compared with October 2016 sales of about 11,000. September 2017 sales figures set a record, as 21,325 vehicles were sold, up 24% from the 17,225 moved the previous year. All the auto-making heavyweights, led by Tesla, have thrown their hats in the ring. Now, the increase in production is beginning to affect battery costs as economies of scale kick in. Lithium-ion battery costs fell by over 50% from $599/kWh in 2013 to $273/kWh in 2016 as battery producers raised output, according to Bloomberg Technology (http://nnw.fm/8eX75). The trend is likely to continue as demand for EVs continues to rise. Cost reductions from economies of scale are likely to trump any increase in the cost of lithium. Bloomberg estimates that a 300% increase in lithium prices would increase battery costs by only about 2%. Output increases are moving unit costs down at a much higher rate.
While lower costs are certainly a powerful driver of the EV bandwagon, government policy is also playing an important part. A number of OECD countries have laid out zero-emission mandates that will take effect over the next two decades. Norway wants its new passenger cars and vans to have zero emissions by 2025. In addition, India will ban the sale of new gasoline and diesel cars by 2030, while France and the U.K. plan similar bans by 2040. Meanwhile, China is targeting 2030 as its deadline, with only fully electric cars will being sold in the country following that year.
RGDCF is gearing up to meet the looming demand. The company now has five lithium properties, and two of those have shown a great deal of promise. The first, at Hidden Lake, is located approximately 40 km northeast of the city of Yellowknife, NT, and consists of two mineral claims totaling approximately 1,100 hectares. It is highly prospective for spodumene-bearing lithium pegmatites, with samples indicating between 1.37% and 3.01% Li2O. The very high grades of lithium have been attributed to observed concentrations of coarse-grained spodumene and crystals of up to 36 inches in length were also noted, with visual estimates across the dyke(s) in some places of 20 to 35%. The second, at Pontax River, consists of 104 mineral claims covering four blocks totaling approximately 5,536 hectares (13,681 acres) near Eastmain, Quebec, an area that has shown high levels of spodumene-bearing pegmatite.
The company also recently acquired three new properties. Each is an early-staged lithium pegmatite project with the potential to be a stand-alone property. The new deposits are sited at Corvette, Eastmain, and Lac du Beryl, and they consist of 115 mineral claims on a combined 14,710 acres, all rich in pegmatite. Pegmatite is a type of crystal-heavy igneous rock and is a good source of ‘hard rock’ lithium, which represents about one-third of all global reserves.
For more information, visit the company’s website at www.92Resources.com
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