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Albemarle CEO says long-term lithium demand remains “robust”

Albemarle confident of long term demand for lithium driven by electric vehicles and battery storage

Albemarle, the world’s largest lithium producer, expects “robust” long-term demand for the electric vehicle battery mineral.

Reuters reports that Chief Executive Luke Kissam said the forecast was despite troubles in the existing market due to oversupply.

The outlook comes as shareholder anxiety about Albemarle and its peers has escalated in recent months, with the industry having produced far more of the white metal than EV makers currently need.

Wall Street analysts have downgraded Albemarle and dinged Kissam’s management as a result, with JPMorgan analysts going so far as to say the company is “overvalued.” Albemarle’s shares are down 16% since January.

Kissam rolled out a robust defense of the company, which produces lithium in Chile and Australia and supplies the white metal for use in Tesla vehicles, telling investors he will work to control costs and produce only what the EV industry requires. 

“The demand outlook for lithium remains robust,” Kissam said at the company’s investor day in New York, which was webcast. “We have enough lithium to satisfy demand for next 10 to 15 years.”

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Looking out to 2024, Kissam forecast a 38% jump in revenue, helped largely by the company’s lithium business. The company expects its lithium production capacity to more than double by 2024 to 225,000 tonnes annually.

The five-year forecast time frame appears to have been consciously chosen: many EV analysts expect global production of electric vehicles to reach a tipping point in 2024, a development that would fuel a surge in lithium demand. 

“Without lithium there are no electric vehicles,” said Kissam, an attorney by training who became CEO in 2011. 

The Charlotte, North Carolina-based company last held an investor day in March 2017, well before Volkswagen AG and other major automakers announced plans for all-electric fleets of vehicles. 

Kissam admitted that Albemarle went on an expansion spree because he did not anticipate the rapid growth in the EV market, a growth that then overshot demand as a result.