On leadership

Les Heimann writes: Re. “Rundle: you have seven weeks to get ready for a Trump presidency” (Friday). So Guy Rundle believes Donald trump will be President of the USA. His reasoning is sound; this guy is outrageous and extreme in his campaign but he offers something. That makes one think of Hanson in Australia and other so called extremists around the world.

Moderate leaders are in trouble everywhere, Angela Merkel a great example. One by one they will fal — for the same reason Turnbull will fall. The world is totally fed up with professional politicians – seekers of power with no conviction. Couple this with the economic and violent madness afflicting the world we have a potent mix that could erupt in a tidal wave of sectarian violence, revolution and plain mayhem that would bring the entire world down around our ears.

We need strong leadership, massive job creation and heavy control over economic excesses. In Australia, Great Britain, the EU, Japan and India we won’t get this. In the USA, under Trump, and only under Trump, we will and in China and Russia we will also. Can everyone not see where we are heading?  Everything Trump and Hanson stand for is anathema to me but they will be strong and decisive. Where are the middle road leaders of the world? Why are they dithering? Is it because after all they are not leaders but simply seekers of power? I have my finger well and truly stuck in the dyke right now – what are you all doing?

On Tesla

Paul Gregory writes: Re. “The impending tragedy of Elon Musk” (Friday). I was a Tesla shareholder between 2015-16. While researching Tesla I also did a lot of research in the Lithium space for my own Lithium investments. It became fairly obvious that Tesla’s strategy to securing raw materials for its Gigafactory was non-sensical. Instead of signing binding off-take agreements with the major producers (SQM, FMC, Albermarle and Tianqi) they have signed non-binding agreements with two junior lithium developers. One of the developers are using prototype technology to extract Lithium from hectorite clays, which has never been done on a commercial scale before.

When Musk moved the production target of 500,000 vehicles from 2020 to 2018 on a whim (most likely driven by the disaster of the Model-X and the need to accelerate Model 3 production), I knew something was up as there is a chance that there will not be enough battery-grade Lithium Hydroxide produced on the planet to fulfil that order for Tesla alone, let alone demand from the booming Electric Vehicle sector (e.g. LG Chem, BYD, Samsung). Experts in the battery supply chain (Simon Moores from BenchMark Minerals, Chris Berry from Disruptive Discovery and Joe Lowry (ex-FMC, now independent Lithium consultant) all agree that Musk will struggle to obtain enough battery-grade Lithium Hydroxide (the preferred chemistry used by Panasonic cathode producers) to meet his arbitrary production target. And that if he was able to source enough material, it would all come via Chinese converters (i.e. Tiangi, Ganfeng Lithium et al) at exorbitant prices, because there is no way the junior developers who has agreements with will be producing in sufficient quantities by 2018. China will be the only source of additional capacity in the near term before SMC and Albermarle expand their capacity in South America.

I’m not even going to discuss Tesla’s on-going quality issues, you can follow E.W. Niedermeyer or Bertel Schmitt for that. Or Tesla’s history of conflict with its automotive suppliers. Or the disaster of Solar City, whose leasing business model is now out-of-date due to the rapidly falling cost of rooftop PV. The market still believes that the merger won’t go through, see here.

There is no doubt that the Tesla Model S is an iconic car which has changed the way the world looks at personal transportation forever. However I believe that Tesla will soon go the way of Blackberry. The reported talks between Apple and McLaren, Google and Uber’s success with LIDAR based autonomous systems and the recent launch of the Chevy Bolt add further weight to that.