Sunday, July 18, 2010

Powered by LIthium: Barrons: A Big Bet on Electric Cars TNR.v, TSLA, RM.v, LI.v, LMR.v, CLQ.v, WLC.v, HEV, AONE, GM, GOOG, RIMM, NSANY, BYDDY, F, TM,

"Our Second Bull Leg in Lithium market has officially started today with this M&A play: Talison buys Lithium Brine developer Salares Lithium. Please notice the premium:

"Based on a price of CAD$3.50 per Talison share, the terms of the proposed transaction provide Salares shareholders with a premium of approximately 98.2% (equal to CAD$1.25 per Salares share) based on the trailing 20 day volume weighted average price for Salares shares on the TSX Venture Exchange."

Chinese backing Talison are making their way into lithium brine market in Chile and are ready to pay a very high price to secure supply. Now Canadian Lithium Juniors should enjoy their moment and potential targets for J/V deals are all on one hand in the lithium brine market in Chile and Argentina."

Electric Cars are taking mass media by storm again and after Nissan Leaf and Obama endorsing lithium ion battery makers and GM Volt Shai Agassi takes the spotlight with his idea "Our Goal is Not to Build a Car Company, Our Goal is To End Oil". According to him with 150 USD per barrel of Oil 1.5 Trillion USD will disappear from G20. You know from our previous discussions that we are not sure where business model of Better Place will be the winner in the end. Essentially Better Place is commodotising the Electric Cars in order to make batteries' swap possible. Auto brands on the other hand are selling by making branding a priority selling point apart from very cheap segments of the markets. Will automakers be ready to share the EV mass market with Better Place or its place will be only in recharging infrastructure and small fleets? New announcement by Tesla that its Model S will come with option for battery swap gives more credibility to this approach. If Better Place succeed not only bringing the message about Electric Mobility, but as a viable concept for part of the EV mass market our battery and Lithium supply plays will be thriving: you need more batteries than cars in this business model. Main message for us from Shai Agassi this time is that "China gets it". "Ones China does it - it is bound to happen everywhere" Now we can put our Lithium M&A fever into another prospective. Talison taking out Salares Lithium is a clever entry point by Chinese business backing Talison into the Lithium Brine business without making two many waves before they can secure new deals in the sector. Our idea about Second Leg of this Bull market in Canadian Lithium developers receives more confirmation on fundamentals and now we need to see the action in the market place. With all junior companies at the low base valuation from last year run we can have rally in the making already. Listen to Shai Agassi interview on video below, he has a good listeners already among Better Place's backers - HSBC, Lazard Asset Management and Morgan Stanley:

WIRED Video: Shai Agassi Says China is Electric Vehicle ‘Tipping Point’


Plugged In SATURDAY, JULY 17, 2010

A Big Bet on Electric Cars


Start-up Better Place reveals details of its electric-car-battery business, which will feature a network of switching and recharging stations.

PRESIDENT BARACK OBAMA was in the western Michigan hamlet of Holland last week to bless the site of an electric-car- battery plant being constructed by an American subsidiary of South Korea's LG Chem (ticker: 051910.Korea). The Obama administration has pumped more than $5 billion in grants and loans into the economy to spur investment in electric cars, rechargeable auto batteries and hybrid batteries—and that doesn't include the $80 billion spent to save General Motors.

The president's visit to the Great Lake State coincided with Uncle Sam's prediction that the cost of electric-car batteries would plunge 70% within five years. LG Chem is forecasting a 50% drop in the same span. Either way, lower battery prices are likely to mean lower ownership costs for electric cars, which could help jump-start their acceptance in the land of the gas hog.

Two days before the president's visit, in the shadows of Stanford University in Palo Alto, Calif., a car-battery outfit of a different kind was sharing its plans. Privately held Better Place, a high-profile Silicon Valley startup founded by former SAP executive Shai Agassi, is concentrating on maintaining, switching and charging batteries. The nearly three-year-old outfit, which has raised almost $700 million, aims to keep electric cars juiced. Better Place provides batteries, and stations along streets and highways where drivers can re-energize their vehicles, either by charging their batteries or quickly having them exchanged for charged-up replacements. The average electric car can go up to 100 miles without recharging, although the distance varies with temperature, the hilliness of the terrain, the speed at which the vehicle is driven and other factors.

Better Place has separated car ownership from battery ownership, concentrating solely on the latter. The company sells miles via subscription-based plans, similar to the way mobile-phone customers pay for cellular service. "We're the AT&T for electric cars," a Better Place spokesman says.

Renault, Better Place's first car partner, is making a switchable-battery electric sedan called the Fluence ZE. "The reactions [to the Fluence] have been amazing," CEO Agassi says.

The company's first two markets are Israel and Denmark,both of which will have countrywide networks of charging/switching stations operating by 2011. They were chosen, in part, because of their high gasoline costs, government support for electric cars and relatively small geographic areas. Australia will follow later next year, and the San Francisco Bay area and Hawaii will get stations in 2013. Eventually, China will be the most important market, Agassi says, as it strives to become the world's largest exporter of electric cars.

The former software titan would like to see the U.S. increase its investment in electric-battery infrastructure, as opposed to just batteries and cars. Only $400 million in stimulus funds were targeted for infrastructure, versus $2.4 billion for electric batteries. Without a recharging or switching network, the American market won't take off, Agassi says, noting Detroit, Washington and San Francisco have made progress, but "are stuck somewhere in between."

A stock offering is part of the Better Place plan, and the early success of Tesla Motors' (TSLA) IPO in late June—the shares shot up more than 70% before round-tripping—suggests it could come sooner rather than later. Tesla is a Palo Alto-based maker of electric cars, now partnering with Toyota (TOY). Better Place's backers include HSBC, Lazard Asset Management and Morgan Stanley."
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