Lithium

Tesla stock jumps 13% after smashing quarterly vehicle deliveries

Tue 04 Jan 22, 10:32am (AEST)
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Key Points

  • Increasing EV sales is driving a shortage in spodumene and lithium carbonate
  • Tesla aims to drive vehicle sales to 20 million annual over the next nine years
  • ASX lithium stocks have had a breakthrough year, will it continue in 2022?

Tesla single handedly boosted the Nasdaq by 1% after the electric vehicle (EV) maker topped fourth-quarter and full-year delivery expectations. The company’s stock closed 13.5% higher and less than 3% away from setting a new all-time high. 

Tesla delivered 308,600 electric vehicles in the fourth quarter of 2021 and 936,172 vehicles for the full year. By comparison, Wall Street analysts expected Tesla deliveries of 267,000 in the fourth quarter and 897,000 for 2021, according to FactSet. 

Investors rallied behind the news, with 34.5m shares traded overnight compared to Tesla’s 20-day average of 23.3m shares. 

The deliveries provide an encouraging preview for Tesla’s fourth quarter earnings, which will be announced in the coming weeks. 

Electric vehicle boom 

Global EV sales rose 18% quarter-on-quarter in the September quarter 2021, marking a 93% increase compared to a year ago.

Global EV sales are expected to exceed 5m units in 2021, compared to 3m units a year ago.

2022-01-04 09 42 45-Resources-and-Energy-Quarterly-December-2021.pdf

 

The increasing EV uptake, especially across China and Europe is driving a shortage in spodumene and lithium carbonate. 

The Australian Government’s commodity forecaster, the Office of the Chief Economist, expects world demand for lithium to reach an estimated 486,000t of lithium carbonate equivalent (LCE) in 2021 and jump to 724,000t by 2023. 

From a supply perspective, output is estimated to reach 821,000t in 2023. However, “at this stage, supply from mine and brine operations is falling short of matching demand growth,” the OCE said. 

“Project development is underway, but will take time to fill the supply gap.”

Another breakthrough year for ASX lithium stocks?

The top performing stocks of 2021 (above $300m market cap) was littered with lithium names including Sayona Mining (ASX: SYA) and Lake Resources (ASX: LKE). Both of which rose more than 1,000% last year.

On the larger end of town, Allkem (ASX: AKE) and Pilbara Minerals (ASX: PLS) rose 129% and 267% in 2021.

The OCE forecasts firmer spodumene prices in 2022, expecting prices to average US$1,185/t from an estimated US$720/t in 2021.

Likewise, it expects lithium hydroxide prices to rise from US$7,300/t in 2020 to US$18,940/t in 2023.

Despite lithium stocks rallying to lofty valuations, lithium is becoming a strategic resource and a centerpiece to achieving net-zero emissions.

As we've seen this year with commodities such as coal and iron ore, as long as spot prices stay high, investors seem to have no issues with valuations.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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