It’s a Long Way From the Lab to the Market
It seems like it’s every day we see headlines about some new breakthrough that’s going to substitute something cheaper for the cobalt in lithium-ion batteries—or replace lithium batteries entirely. I’ve seen both sodium and fluorine suggested just in the last few days.
Now, both sodium and fluorine are highly reactive, making them interesting to work with. I wouldn’t bet on either of these technologies coming to market anytime soon.
But the bigger picture is that any new design takes a lot of time to get from the lab to the market, even when they use the most common and benign materials.
I remember visiting a materials lab just outside of Vancouver, BC. I was shown a new auto pollution-control device that used nickel instead of the much more expensive platinum or palladium used today. I was told that though still in final testing, the device worked well already.
The company that held the patent was supposedly in talks with major automakers like Ford. Their valuation, I was assured, would go through the roof as soon as the first big deal was signed—and that was almost 10 years ago.
I can’t say whether this product will ever make it to market. But scientists and engineers are always improving things. At some point, if we haven’t gone all-electric by then, I’m sure platinum and palladium will get replaced. I’m also sure the cobalt content of lithium batteries will be reduced or eliminated. Lots of things will change, as the market constantly reaches for lower costs and higher performance.
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The point is that we can’t get spooked out of great companies in high-demand minerals today just because someone claims to have invented a better mousetrap.
We have to wait and watch for new designs to actually go into commercial production. And even then, to be a rational speculator rather than a wild gambler, we need to watch for real market adoption. Only then should we place our bets on a powerful trend in visible, measurable motion.
I’m not the least bit worried about lithium batteries going away.
I am concerned about that new supplies of lithium and cobalt may take prices of those metals lower.
Nickel is the battery metal I see the least chatter about replacing, and it still looks to be facing a substantial supply deficit. Copper is looking good too. Both of these, however, would see lower prices if the global economy slows, despite higher demand driven by the new energy paradigm.
At the end of the day, it’s supply and demand in the current commercial setting that determines prices—not impressive headlines about possible discoveries in science labs.
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Lobo Tiggre is the founder and CEO of Louis James LLC, and the principal analyst and editor of IndependentSpeculator.com. He researched and recommended speculative opportunities ... <Read more about Lobo Tiggre>