Recent rumors that Tesla is considering acquiring battery-metals miner Sigma Lithium drew a response from analytic firms. Bank of America and Wells Fargo have begun evaluating a possible deal.
Late last week, Bloomberg, citing unnamed sources, said that Tesla is considering acquiring battery-metals miner Sigma Lithium. The message included information that the Texas-based manufacturer was in talks with unnamed consultants a few proposal. Neither Tesla nor Sigma Lithium have confirmed or denied the data that appeared. Nonetheless, analysts are eager about the rumor and even gave their evaluations of the potential deal, which may indicate that they consider it to be highly possible.
Bank of America said the acquisition of Sigma Lithium would give Tesla control over annual lithium production, enough to provide 1.25 million to 1.5 million electric vehicles, which can be quite strong. The firm said it still sees significant value in Sigma’s shares given the discount to valuation and upside potential to the resource size through further drilling activity.
Wells Fargo believes that the potential Tesla-Sigma deal will secure needed supplies of lithium and help the US-based maker turn a profit going forward. At the identical time, analyst Colin Langan warned that the situation of the lithium mine is more likely to be exempt from the Inflation Reduction Act (IRA). He points out that this is able to create latest operational risks. The analyst sees that a Sigma deal could add capability to provide around 1.7 million vehicles a yr, assuming the mine operates at planned levels.
“Sigma is targeting 36.7 ktpa LCE of lithium production in Phase 1 and 67.4 ktpa LCE in Phases 2 & 3. GM’s LAC investment secured 40 ktpa LCE which impliesly supports 1M vehicles. This Sigma Phase 1 could support ~0.9M vehicles and Phase 2 & 3 could add capability for ~1.7M vehicles, if the mine produces at targeted levels. This compares to TSLA’s 2022 delivery goal of >1.8M.”
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