When it comes to the lithium market, Tesla Motors (NASDAQ:TSLA) normally takes center stage. However, 2015 has brought a new player to the electric vehicle space, and to Nevada, adding more weight to calls for rising lithium demand for electric vehicle batteries.

Electric car startup Faraday Future announced on December 10 that it is planning to build an automotive production plant in North Las Vegas, and is investing $1 billion into the first phase of the facility. The company has received a $335-million incentive package from Nevada’s government for the factory, according to Hybrid Cars, and it is aiming to produce its first vehicle by 2017.

According to The LA Times, the company is backed by Chinese billionaire Jia Yeuting, who founded Leshi Internet Information & Technology and is worth roughly $7 billion.

Much like Tesla Motors, Faraday Future has big plans to disrupt the automobile space. The company plans to offer smart and seamless connectivity to the outside world, and is looking at developing in-vehicle content and autonomous driving.

Get Our Expert Guide to Lithium Investing FREE! Download this FREE Special Report, Investing in Lithium Stocks Post Rockwood Lithium Sponsored by Dajin Resources Corp.

Competing with Tesla Motors

Certainly, it appears that the electric vehicle startup has plans to compete with Tesla. The LA Times points out that Jia told The Wall Street Journal earlier this year that he would like to develop a vehicle to rival those at Tesla Motors. Furthermore, a vendor working with the company told the Times, “[t]hey told us right off that this is China’s response to Tesla.” On top of that, four out of five of the members of Faraday’s leadership team are originally from Tesla.

On Wednesday, Faraday released a teaser video of its new concept car, which is set to be revealed on January 4 at the International Consumer Electronics show in Las Vegas — some are already calling the car a “Tesla Killer,” according to BGR.

Our concept reveal is in 5 days at #CES2016. Watch live at 8pm PST on Jan 4: https://t.co/hMuj6HUGXN#CarOfConceptshttps://t.co/aDEDt7O9na

— Faraday Future (@FaradayFuture) December 30, 2015

As yet, Faraday has revealed few details about its car, meaning that it’s difficult to say what can be expected from the company, or what its success might mean for Tesla’s business. That said, it’s worth remembering that Elon Musk and Tesla Motors opened the company’s patents back in June 2014 “in the spirit of the open source movement, for the advancement of electric vehicle technology.”

“If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal,” Musk said at the time. Investors might feel differently, but it appears that for Tesla Motors, having one more competitor might not be the worst thing in the world.

What could Faraday Future mean for lithium?

As one might expect, the addition of another electric vehicle manufacturer to the market will only add to already rapidly growing lithium demand. That’s a point that was touched on by Benchmark Mineral Intelligence in a recent article on the company.

“Faraday Future aims to have its first EV on the road by 2017 adding yet further battery demand to an already squeezed market in this timeframe,” Benchmark states.

Indeed, a number of other market analysts are expecting supply to be tight for lithium in 2016, even if new players such as Orocobre (TSX:ORL) succeed in further ramping up production. More importantly, as Joe Lowry of Global Lithium has explained, Tesla is far from being the largest end user in the lithium space, despite the company’s moves to pressure companies to sell their lithium at low prices.

“The Big 3 and major China producers don’t need Tesla,” he states in an October article. “The real irony is that Tesla’s hardball tactics will only ensure their cost of lithium hydroxide is higher over the next few years. The Gigafactory will spike lithium hydroxide demand significantly and only the high cost Chinese suppliers will have the spare capacity to supply.”

So far, there have been two announcements regarding conditional lithium supply agreements with Tesla — the company’s first is with Bacanora Minerals (TSXV:BCN,LSE:BCN) and joint venture partner Rare Earth Minerals (LSE:REM), and its second is with Pure Energy Minerals (TSXV:PE). However, the electric vehicle maker has not yet announced any agreements with currently producing lithium companies.

Will Faraday Future be in the same boat as Tesla Motors when it comes to securing the minerals it needs for its electric vehicles? As Benchmark states, “[t]he world will be watching whether the company can reach its ambitious goals and whether there will be enough batteries available to make them happen.”

Get Our Expert Guide to Lithium Investing FREE! Download this FREE Special Report, Investing in Lithium Stocks Post Rockwood Lithium Sponsored by Dajin Resources Corp.

Securities Disclosure: I, Teresa Matich, hold no investment interest in any of the companies mentioned. 

The post Will Faraday Future Really Rival Tesla Motors? appeared first on Investing News Network.