Electric Cars Are Driving Lithium Demand

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July 16 (Bloomberg) -- Tesla Motors Former Senior Director of Finance Ryan Popple discusses his tenure at Tesla and his outlook for electric vehicles on “In The Loop.” (Source: Bloomberg)

36% is used in batteries for power tools to tablets to electric cars.

It is also used in glass, glass bottles that hold coca-cola are going to use lithium.

It is used in medication and space shuttles and defibrillators.

Anything you can think of, is used in.

Batteries is where the growth is going to be.

.10 of an ounce is used in phone batteries, 50 pounds for an electric car.

20 million electric cars will hit the road by 2025, that is from hybrids to plug-ins.

Overall lithium consumption could grow 9% year.

You brought over tesla -- you brought up tesla, his battery factory could eat up 17% according to goldman sachs.

Ryan, you were there with tesla motors from the start and now you're building electric buses.

Is this possible supply constraint, is that what keeps you up at night?

No.

i think we have found lithium to be a stable commodity and source of technology for our transit buses.

One of the things that benefited us is other industries have come before us.

In terms of scaling up and delivering mass quantities of high-quality lithium ion.

If you look at the history of lithium-ion, it was first developed for the consumer electronics industry.

Countries like tesla, commercialized it into cars and companies like proterra are taking it into infrastructure vehicles.

It is a very sophisticated industry and you have great companies supplying it.

What do you make of elon musk's plan for a $5 billion ego factory -- gigafactory?

It makes a lot of sense.

Car companies want to control their drivetrain technology and vehicle design.

For tesla, they are going to move into the core technologies that really can make or break their future.

I have not been a part of tesla motors for over four years now.

But their strategy has always made sense in terms of owning the core technologies.

First it was motor, battery pack, electronics.

They are moving upstream one step.

The different from a car company that would want to own and control engine technology.

The bulk of supply is controlled by four big producers.

It is quite difficult to actually get lithium out of the ground.

A good asset, you have to be in high altitude and near volcanic sites.

It is a very challenging environment.

Because of this, lithium is incredibly expensive.

Half of the price you are going to pay for the electric car is due to lithium.

Until that rebalance is, the mass adoption we keep talking about could be difficult.

You hit the nail on the head, you mentioned it has been years since you have been at tesla.

How is elon musk one to create an model 3, 30 $5,000 car when so much of that cost is the battery?

How's he going to make money on this?

If you look closely at the numbers, the battery pack cost for tesla and the electric vehicle companies has come down dramatically.

I started with tesla in december 2 thousand seven.

When i left, that the number had moved pretty significantly.

If you look at the publicly available information now, their cost has come down dramatically since 2010. at proterra, the cost of a battery pack is not the challenge.

We have a two year two for your payback for customers.

We are offsetting to $2000 in diesel fuel consumption per year -- we are offsetting diesel fuel consumption per year.

You can recycle lithium-ion batteries, you cannot recycle oil or natural gas.

This supply chain, these will come back into the supply chain.

What do you learn from your time at tesla motors and from working on the roadster that you apply to the electric city buses that you are selling to urban governments?

I would say three lessons from tesla were important.

One was how to run and operate a lean startup.

You have to be capital efficient in a hardware business.

That is one of the things we pay attention to at proterra.

How do we manage working capital.

The second thing, we think about how to say no to a lack of opportunities out there.

When you have a breakthrough in technology, once you get the initial breakthrough it is really easy to start chasing adjacent markets.

So the lesson about focusing in on your core is important.

We have a huge market in front of us in the u.s. and we are going after it with concentration.

The last thing i would add, it is very important to focus in on the most important aspects of your technology and your product and really get your hands around the systems.

You cannot outsource a prematurely and that is what we do at proterra.

We own the battery pack, manufacturing.

A lot of this is still not well adapted.

The mass market has not adapted electric cars.

There's been a lot of hype around tesla motors itself.

You were there for the early part.

You helped bring the company to its ipo.

We have a stock chart of how the stock has done since the ipo, up almost 1300%. did you think it would get that high?

That there would be that much fuel behind the stock?

Does that raise concerns for a company?

My expertise is in operational financing strategy.

I am not an equity analyst.

In the long-term, it does not surprise me that tesla is and will continue to be a valuable company.

That is due to the size of the market it is addressing and the size of the problem is going after.

If you look at how dependent we are on crude oil, what tesla is

This text has been automatically generated. It may not be 100% accurate.

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