Reliance Masterplan for Indian Battery Sector?

hello everyone lithium which was once

considered as the new oil of the world

the most efficient metal to make

batteries which will run our future

Automobiles and the metal which changed

the very geopolitics of the world the

metal whose growth was once considered

as indisputable is crashing from the

last few months and hear me out it's not

a cyclic crash of 10 to 20% just give a

thought how much it might have crashed

I'll give a hint it's more than 50%

lithium price crashed by more than 80%

from its all-time high in November 2022

almost losing all of its value check

this lithium commodity graph this is the

year AIS and this one is the price AIS

now lithium is traded in Chinese yon so

the values are in CNY y per turn from

2017 to November 2022 lithium price sold

to its all-time high of about 6 lakh

Chinese yon per ton this is about 70

lakh 80,000 rupes per turn but since the

prime days of lithium today the price

has crashed by 84% to Mere 1 lak 8,500

Chinese yon this is around 12 80,000

rupees per ton and so lithium prices

have essentially collapsed unraveling on

over Supply fears at the beginning of

the year spot prices topped $70,000 per

ton according to Benchmark but today

they're trading under

$166,000 a decline of nearly 80%

probably lithium is down about 80% in

just 12 months just a little bit over 12

months so it's a huge fall for the price

of lithium well lithium prices spiked

back in 2021 before crashing back to

Earth at the end of last year but it

could just be the beginning of the

Fallout so what happened last year that

extracted all the value of this precious

metal and how Reliance is involved in

this whole picture so let me give you a

structure or mind map we will be

following in today's episode we will

understand why lithium is crashing under

two variables the supply side and the

demand side we will evaluate the supply

side by the production of the mining

companies similarly we'll evaluate the

demand side by two factors namely major

EV markets and sodium ion batteries next

we'll see how Reliance is taking a

strategic position in the battery sector

and lastly we'll see whether lithium

will regain its value or not so let's

begin now since we know that the lithium

price has crash as a basic economics the

supply side must be higher than the

demand side right but how can Lithium be

so Surplus that it crashed by 80% isn't

lithium a scarse resour isn't everyone

tussling to get lithium well there is a

story behind it in the year 2022 the

demand for electric cars were Rising

rapidly Tesla was on their peak days and

every major economy was promoting

electric cars as a result the demand for

battery grade lithium spiked up and

during that time all the major Market

analysts predicted that the demand for

lithium will be higher than the supply

till 2028 the same year S&P Global

predicted that the lithium demand will

reach 9ak 89,000 metric tons in the year

2023 which will be more than the supply

and it will double to over 2 million

metric tons by 2028 this demand Supply

mismatch will only go by 2027 so the

entire EV Market was very optimistic

towards the rise in the demand of

lithium because the demand for electric

cars were at its peak now to meet the

rising demand and led by the high prices

of lithium in the year 2022 the mining

companies across the globe push their

production to the record Heights look at

this graph from the year 2022 to 2023

the global lithium supply increased by

31.3% similarly this year it increased

by

25% so in 2 years the total supply of

lithium increased by almost 50% pillur

minerals is Australia's largest lithium

minor they've got a lot of lithium mines

and some of the smaller producers have

already announced they're going to stop

mining lithium and just mine the stock

piles that their mines uh at the moment

so there's a serious problem with the

lithium Market because there been a

massive oversupply of lithium but even

this production was considered low

compared to the demand what analysts had

predicted so the mining companies

thought they were at the least risk the

stage was said the mining mafias were

ready to roll up their SLE leaves and

count some big cash but the plot takes a

very unexpected twist the demand for

electric cars did not perform as

predicted now there are two major

reasons for the poor demand firstly low

demand in the biggest EV markets see USA

and China consume 70% of the global EV

batteries because they are the biggest

EV sellers now these two markets did not

perform as expected let's look at China

first see China had a policy where they

gave subsidies to the consumers on the

purchase of electric cars now these

subsidies were removed by the end of

year 2022 increasing the price of

electric cars in China and there is a

very interesting strategy on how China

dominated the global EV sector and I'll

make a detailed video about it but for

now since the price of these cars

increased after the subsidies were

removed the demand for EVS fell

substantially and something similar

happened in us as well just look at this

graph this is the graph of US federal

rate and as you see the federal bank

rate in USA is at a 15year high right

now this is the rate at which banks take

loan from the Federal Bank similar to

repo rate in our country but how Federal

bank rate is affecting the ev's demand

let's understand this through this

animation Sam is a US citizen who wants

a loan for his property he went to his

bank named City Bank and as we saw the

US federal rate is 5.5% right now this

is the rate at which city bank took loan

from the US Federal Bank since City Bank

wants to make profit they gave property

loan to Sam at 7% interest rate keeping

a margin of

1.5% now Sam was expecting it to be

somewhere around 4 to 5% but since he

must be 2 to 3% extra interest now he is

left with lesser money to spend on other

expenses like an electric car or a

television or a vacation trip now the

people like Sam and the companies of us

were expecting that the US Federal Bank

will lower the rates making the property

loan much cheaper but it turned out that

the federal bank is in a no hurry to

lower the rates ultimately deteriorating

the demand for electric vehicles the

longer that interest rates uh stay at an

elevated rate the cost of capital

obviously is uh is higher um so until

that uh EB demand comes back these

companies are sort of in this bare

Market the companies had planned massive

investment on the pr of much faster

adoption of EVS this is not playing out

and that and now we're hearing from

corporates that they're pulling back or

canceling all together these investment

just last week Ford basically said

they're not going to spend 12 billion

out of the 50 billion they they were

going to spend in EVS GM has pushed out

a second EV Factory by about a year now

since the demand for EVS fell in these

two major EV markets naturally the

demand for lithium batteries fell

drastically and as we saw the supply of

lithium is at its alltime high so

friends as smart as you are if the

supply is too high and the demand is too

low inevitably the price of lithium

drawn by 80% but apart from low demand

in these two countries there is one more

major reason which is affecting the

demand for lithium the rising demand of

sodium ion batteries but how did sodium

ion batteries become such a tough

competition to the lithium ion batteries

well there is a very major geopolitical

reason behind this see right now around

87% of total lithium produced is used

only in EV batteries and guess what no

major economy wants this much dependency

on lithium for producing batteries why

simply because there is a huge

geopolitical consequence to it right now

there are very few countries who produce

lithium and lithium dependency means

dependent on that country as well it

will become similar to oil where the

whole world is depend depent on the oil

producing countries in this case the

whole world will be dependent on the

lithium producing countries and after

the Russia Ukraine war when the entire

Europe was dependent on Russia for oil

but diplomatically fighting against them

in the war got stuck in a g situation

and no other country wants a similar

situation in future with lithium but

what's the solution how can we not be

dependent on lithium well the solution

was to innovate non- lithium based

batteries well guess what there is one

Innovation which proved very successful

in this regard yes sodium ion batteries

and the growing demand of sodium ion

batteries is really affecting the demand

of lithium ion batteries because sodium

is salt and salt is abundant everywhere

in the world it doesn't require mining

so it's more environment friendly it's

30% cheaper than lithium batteries it

has higher overall lifespan than lithium

batteries and it's highly non-flammable

compared to lithium batteries so nobody

will ask you to remove the power Banks

from your luggage in the airport and

most of all no country will be dependent

on each other for creating batteries but

there is one drawback to sodium ion

batteries we'll talk about it but for

now in summary since the supply of

lithium shot up because of too much

optimistic estimation of EV markets the

demand fell in the major EV markets like

USA and China and at the same time an

alternative to lithium battery R is also

gearing up inevitably the price of

lithium crashed but now you must be

wondering why was I talking about

Reliance in the intro where does

Reliance comes into picture well while

everyone was only focused on the

Glamorous Amani wedding Reliance already

took a very strategic decision for our

Indian battery Market in the year 2022

Reliance acquired 100% shareholding in

fadan limited for15 million fadan is a

UK based company that produces sodium

ion batteries Kate was really developed

in the UK we're making the UK the the

global Center of Excellence for sodium

ion technology but at the same time we

were acquired by Reliance Industries at

the end of last year and Reliance is

planning to open Giga factories to make

sodium ion batteries using fadan

technology so now not only we found

lithium mines in jamu and Kashmir we

also have a major company producing

sodium ion batteries making India Future

Ready but now the question that evolves

here is since sodium ion batteries is

better than lithium ion batteries in

most of the aspects will it completely

replace the lithium based batteries and

will lithium ever regain its value well

like I said there is one major drawback

to sodium ion batteries sodium ion

batteries are not as energy efficient as

lithium ion batteries in simple words

sodium ion batteries need to be 40%

bigger than lithium ion batteries to

produce the same am amount of energy

it's not space efficient it can only be

used in a places where space is not a

big issue like heavy Vehicles charging

stations data centers or renewable

energy storage but EV cars require

compact batteries which can fit without

taking much space and there is no

alternative to lithium ion batteries in

that sense hence even though the price

of lithium has crashed right now the

demand for Ev cars will rise again

ultimately pushing the demand for

lithium as well lithium will regain its

value and only time will tell when so

viewers and subscribers that's the end

of today's video and as usual I'll link

down all the resources I used to make

this video and if you found anything

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