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Collaboration Deal with Sumitomo, Nano One to Boost LFP Cathode Production in Canada

Nano One Materials Corp. (TSX: NANO) operates the sole North American lithium iron phosphate (LFP) production facility located in Candiac, Quebec, with plans to convert the existing facility to the One-Pot process for production up to 2,000tpa by the end of 2024. The company will expand the production in Quebec to meet demand and its business model incorporates licensing and joint ventures for global expansion.

In an announcement on September 14, 2023, Nano One reported significant progress in demonstrating full commercial scale volumes from the Candiac facility. The company states:

“Recent One-Pot trials at the Candiac plant have yielded LFP at commercial scale with results mirroring lab performance. Transitioning to full commercial size reactors, Nano One’s LFP is ready for Q4 customer evaluations. Moreover, installation and optimization of the 200tpa reactors are ongoing.”

Source: Nano One company presentation

Additionally, Nano One recently announced a collaboration agreement with global cathode materials giant Sumitomo Metal Mining on September 25, 2023. This announcement included a strategic equity investment of C$16.9 million commitment and will undoubtedly provide potential opportunities in sales, licensing, and partnership opportunities. Notably, Sumitomo is a supplier of materials to Panasonic which in turn supplies Tesla with battery cells which shows the quality of their client lists.

Sumitomo’s established role in the sector as a leading miner, refiner, and cathode active materials producer solidifies the significance of this collaboration.

With global trends leaning towards the electrification of transport and clean energy, the demand for batteries and cathode materials is surging. Forecasts predict the cathode market in North America and Europe alone to reach US$85 billion by 2035, presenting unprecedented opportunities for emerging market players.

Nano One’s Business Strategy

While Nano One’s strategy remains versatile, the primary focus will be LFP production initially in Canada at the Candiac facility. Its business model includes licensing and joint ventures with partners for global expansion in jurisdictions like the US, Europe, and Asia.

In Conclusion

Nano One’s evolution from a minor participant to a significant player in the cathode materials sector is evident. Collaborations with industry leaders like Sumitomo, Rio Tinto and VW place them prominently on the map. The company currently boasts a market cap of C$320 million.




Investor.Coffee USA (9.27.2023): JPMorgan Reshuffles its Investment Banking Division

As September draws to a close, the U.S. equities market has experienced some turbulence. Following a challenging Tuesday, U.S. futures seem to be ticking upwards despite all three major indices, including the Dow, witnessing significant drops. The Dow notably had its worst performance since March. The market’s unsteady temperament could be attributed to several factors. August saw a steep decline in new home sales, Amazon found itself in the midst of a significant antitrust lawsuit, and the Conference Board’s consumer confidence index dipped more than anticipated.

In corporate news, Alphabet Inc. (NASDAQ: GOOG) is in the spotlight as PwC Australia admitted to providing several clients with confidential information from Australian government tax briefings. While it was previously known that Google was one of these clients, it’s now revealed that there were others, though their identities remain undisclosed due to confidentiality concerns.

Amazon.com, Inc. (NASDAQ: AMZN) is also under scrutiny. Legal challenges are amassing against the online retail titan after the U.S. Federal Trade Commission accused it of abusing its market position. The potential impact of these allegations on Amazon’s advertising business is causing some unease among the platform’s merchants.

The Chemours Co. (NYSE: CC), a U.S. chemical company, has been deemed responsible for environmental damages in the Netherlands due to the usage of PFAS chemicals, known as “forever chemicals” for their enduring nature. In response to the court ruling, Chemours is currently evaluating the decision and discussing actionable measures with relevant stakeholders.

Pharmaceutical giant Eli Lilly and Co. (NYSE: LLY) successfully persuaded a Massachusetts federal judge to overturn a $176.5 million verdict in favor of Teva Pharmaceutical. The dispute revolved around the alleged patent infringement by Lilly’s migraine drug, Emgality.

Political tensions seem to be brewing for Ford Motor Company (NYSE: F) as U.S. House of Representatives committees demand transparency over the company’s partnership with Chinese battery manufacturer CATL.

In banking, JPMorgan Chase & Co. (NYSE: JPM) has initiated a leadership reshuffle in its investment banking division, introducing a new head for its North American operations, as the current leader prepares to retire.

NextEra Energy, Inc. (NYSE: NEE) and Chesapeake Utilities Corporation (NYSE: CPK) are set to enter a deal worth $923 million. The agreement involves the sale of Florida City Gas, which boasts approximately 120,000 residential and commercial natural gas customers.

In the pharmaceutical domain, Pfizer Inc. (NYSE: PFE) is ramping up its antiviral COVID-19 treatment, Paxlovid, distribution, and is awaiting approval for its commercial market release.

Retail giant Target Corp. (NYSE: TGT) has announced the closure of nine of its stores across multiple states due to rising concerns over theft and organized retail crime, emphasizing the growing challenge retailers face.

Tesla Inc. (NASDAQ: TSLA) continues its innovation streak, focusing on upgrading its “gigacasting” technology, aiming to mold almost all vehicle underbody parts in one cohesive unit.

Lastly, Wells Fargo & Co. (NYSE: WFC) is venturing into a partnership with private equity firm Centerbridge Partners. Together, they aim to launch a fund capable of lending over $5 billion to middle-market companies in North America.

Investor.Coffee Daily Updates are intended to offer a rapid bird’s eye view of the business world today and allow you to enjoy your coffee room breaks.




BYD and Tesla are totally dominating global electric car sales in 2023

Many people would probably be surprised to hear how poorly legacy car manufacturers are doing in terms of electric car sales. They would also be shocked how just two companies are totally dominating global plugin electric car sales. Those two companies are BYD Co. Ltd. (OTC: BYDDF) and Tesla Inc. (NASDAQ: TSLA).

BYD dominates total sales with about half coming from pure electric cars and about half from plugin hybrids. Tesla dominates in terms of total revenues as well as profit per vehicle.

The chart below shows H1, 2023 global plugin electric car sales with BYD leading on 1,248,168 sales and Tesla on 888,879 sales.

The next closest is the Volkswagen Group with 425,761 sales, roughly a third of BYD and half of Tesla.

Top selling global plugin electric car auto groups Jan-June, 2023

Source: CleanTechnica

Tesla and BYD’s lead looks set to continue in 2023, currently with a combined 36.6% of the market

Tesla and BYD have been expanding their manufacturing facilities at a feverish pace for the past several years and the results are now showing. Furthermore, by the end of 2023, their lead will be even bigger, in raw number terms. Tesla targets 1.8 million sales and BYD a massive 3 million sales in 2023.

Results like this are leaving internal combustion energy (“ICE”) legacy auto companies at risk of becoming extinct this decade as the world transitions rapidly towards EVs. For example, Toyota only sold 46,171 pure battery electric vehicles globally in H1, 2023.

As shown on the chart below we are still in the early stages of the EV boom with sales forecast to increase exponentially over the next 10-15 years. Given the current dominance of BYD and Tesla, it is looking like they will get a major part of these future sales.

BYD is currently ranked number 1 globally with 21.4% market share YTD (Jan-June 2023).

Tesla is currently ranked number 2 globally with 15.2% global market YTD (Jan-June 2023).

Combined BYD and Tesla currently have 36.6% of the global plugin electric car market.

Global plugin electric car sales forecast to 2040 (green bars)

Source: Trend Investing

BYD sales continue to boom with 261,105 sold in July and 274,086 electric cars sold in August 2023. Tesla’s sales will be released at the end of Q3.

Takeaway for investors

BYD and Tesla are dominating global sales. They are really the only two companies selling electric cars at a profit and it shows with their tremendous growth in profits in recent years.

As reported on August 29, 2023, BYD posted a >200% surge in first half profit, with net profit in the first six months rising 204.68% to 10.95 billion yuan (US$1.50 billion), as compared to 3.6 billion yuan a year earlier.

Tesla’s Q2, 2023 net profit rose 20% YoY, despite massive price cuts for their vehicles. Tesla made ~$25 billion in revenue in Q2 (up 47% YoY), which puts them on a run rate of US$100 billion per annum in revenue. Q2 GAAP net income was a very nice US$2.7 billion. Looking ahead Tesla has multiple catalysts that can potentially surge revenue including – Cybertruck and Semi sales, Megapack sales, a Compact Tesla (Model 2) coming soon, and their AI potential via Full Self Driving (“FSD”) (robotaxis, Dojo, and Optimus robot).

Tesla recently revealed their updated Model 3 with sleeker styling, longer range, new interior features and much more

Source: Tesla Australia website

Closing remarks

For the skeptics out there who think the EV boom will not happen please read the next two sentences. Tesla Model Y became ‘the best-selling vehicle globally(of all types) in Q1, 2023. BYD is now ‘the 5th largest carmaker globally‘ with 4.7% market share, based on July 2023 sales.

The EV boom is not only happening, it is happening faster than what most people thought.

BYD and Tesla now sell 36.6% of all global plugin electric car sales and are totally dominating the market. Little wonder both companies have enjoyed spectacular investment returns for shareholders over the past 5 years and look set to continue this decade.

Investor.News will continue to update investors on the progress of Tesla and BYD in 2023, as well as give some updates on their new products and other business divisions such as energy storage which is growing even faster than EVs.




Tesla’s new game changing compact model (Model 2) is coming sooner than you think

The Tesla (NASDAQ: TSLA) compact model (often referred to as Model 2) is likely to be released for sale late 2023 or early 2024 with production starting in H1, 2025. It is expected to sell for ~US$25,000 depending on the location. Pre-orders will be off the charts and may approach a staggering 5 million globally. This will be a ‘game changing’ event for both Tesla and the EV industry.

Tesla compact model possible design and specs (base version)

The Tesla compact model is expected to have the following features:

  • Design – Most forecasts are that the new Tesla compact vehicle will look like a small version of Model Y. It will be a small/compact size electric car and very likely a hatchback. Elon Musk has said it won’t be called Model 2, perhaps it will be called the Model C. We will have to wait and see the new name.
  • 40-50kWh battery pack with a range of about 250 miles (or ~400 kms) in the base model. The battery will probably be a lithium manganese iron phosphate (“LMFP”) (or “LFP”) battery from CATL as this will reduce costs when compared to a nickel manganese cobalt (“NMC”) battery.
  • Price = US$25,000 global average, with pricing potentially a bit cheaper in locations near the manufacturing factories (China and Mexico) where production costs are lower.
  • Global production to ramp to about 4 to 4.5 million pa. Production factories in Mexico (up to 2 million pa), China (1-1.5 million pa) plus a third gigafactory likely in Europe (1-1.5 million pa) (Giga Berlin or perhaps in eastern or southern Europe (Spain)). The Mexico factory construction is about to start now.
  • Available to order late 2023 or early 2024. Production could begin by late 2024 or more likely in H1, 2025.

Elon Musk stated at the Tesla 2023 Annual Shareholder Meeting:

If I were to guess – an Elon guess, if you like – we will probably make in excess of five million units a year of these two models combined.

The two models refer to a compact model and probably a minivan.

Tesla compact car appearance as teased by Tesla in May 2023

Source: Tesla 2023 Annual Shareholder Meeting (52 minute mark of the video)

How is a lower cost possible for the compact model Tesla?

Tesla plans to dramatically reduce costs, aiming for the compact model to cost half the price to produce as the Model 3. That would mean a cost of production for the compact model of about US$18,000. The bullet points below show how Tesla intends to achieve this:

  • A new manufacturing technique known as the ‘unboxed process’. It will reduce complexity and the number of steps needed.
  • A smaller battery than Model Y or Model 3 and probably a more energy dense LMFP battery (LFP battery with manganese) from CATL.
  • A cheaper electric motor that does not need rare earths.
  • Reduced parts and wiring. The compact model will use a new higher voltage 48 volt architecture thereby requiring less wiring.
  • Smaller size vehicle so less material costs.
  • Large scale production from cheaper and more efficient factories.

The compact Tesla is coming sooner than you think

Tesla has been working on the compact Tesla for several years and appears to have completed the design work and is now just starting to build the new factories and organizing the production lines to make the compact Tesla.

At the Tesla 2023 Annual Shareholder Meeting in May 2023, Elon Musk stated (52 minute mark):

“We obviously need to have, you know, a proper dedicated product launch. I just want to emphasize that we are actually building a new product, not designing a new product……we are not sitting on our hands here…..there are two new products that you will be very excited about…..”

Late Q3, 2023 should see the Cybertruck’s first delivery event, so the compact model launch party would most likely be in either Q4, 2023 or Q1, 2024.

As shown below the two new products on the generation three platform are most likely to be a compact car and a minivan. The compact car segment is by far the largest globally, totaling ~700 million vehicles in the fleet today.

Tesla’s new third generation smaller platform will be used for 2 new models – A compact model sedan or crossover and probably a minivan

Source: 2023 Investor Day March 2023

Closing remarks

As announced this week, Tesla has now started production of the Tesla Cybertruck. This suggests that Tesla can now start to focus more on their next new model, the compact Tesla. Will it be called Model 2, Model C, or something else?

I expect the product launch will happen later in 2023 (or early 2024) and production starting most likely in H1, 2025. Following the compact model launch, I suspect Tesla could achieve pre-orders approaching 5 million for their US$25,000 compact car. If I am correct, then this will be a total game changer for EVs and would signal the final death bell for ICE vehicles.




Elcora order is just the beginning of its journey in the manganese market

Manganese is becoming a key part of the lithium-ion battery market, traditionally used in nickel, manganese, cobalt (“NCM”) batteries; but now it is also used in lithium manganese iron phosphate (“LMFP”) batteries. This new battery type offers greater energy density (and hence EV range) than the standard LFP battery. Manganese is still largely used in steel, but the battery demand looks set to grow much faster. Overall the global manganese market is expected to grow at a CAGR of 5.5% from 2023 to 2027.

LMFP batteries containing manganese are the latest development to improve lithium-ion batteries

As announced last month Gotion High-tech Co Ltd. (SHE: 002074) has developed a breakthrough LMFP battery that offers a “range of up to 1,000kms for a single charge and could last two million kms”. Their new battery pack will go into mass production in 2024.

In 2022 it was reported that “CATL will soon mass produce LMFP batteries”. Contemporary Amperex Technology Co., Limited (SHE: 300750) (“CATL”) is the world’s largest lithium-ion battery manufacturer by far with 37% market share and is a leading supplier of Tesla Inc. (NASDAQ: TSLA). At Tesla Battery Day in 2020, Elon Musk pointed out that Tesla targets to use manganese in its batteries for long-range electric cars.

At Tesla Battery Day 2020, Tesla targets to use nickel and ‘manganese’ batteries for long range vehicles where vehicle mass is not too large

Source: Tesla Battery Day video 2020

Note: Red oval done by the author to highlight manganese

Today’s company made a key announcement this week regarding commencement of manganese ore sales.

Elcora Advanced Materials Corp.

Elcora Advanced Materials Corp. (TSXV: ERA | OTCQB: ECORF) (“Elcora”) is working towards becoming a vertically integrated battery material company. Elcora has developed a cost-effective process to purify high-quality battery metals and minerals that are commercially scalable.

Elcora’s key projects have graphite, manganese, and vanadium. Elcora also has exposure to anode materials and graphene.

As announced on June 12 Elcora

has received its first monthly order for 1000 metric tons of 37% + manganese ore. The delivery of the first part of the order is scheduled before the end of June 2023. The order was placed by a leading European customer looking for a long-term supply relationship and marks a significant milestone for Elcora’s mining division.

The order is not large but it marks the beginning of what can be a good business for Elcora if they can achieve large-scale production. Manganese ore (37% Mn grade) currently trades at about US$3.13/ dmtu (Dry Metric Tonne Unit) FOB Port Elizabeth.

Elcora states:

The recurrence of orders is expected to generate significant revenue for Elcora Advanced Materials Corp, further strengthening its position in the industry. With the increasing demand for manganese ore, the company is well-positioned to meet the needs of its customers...Elcora Advanced Materials Corp is well-positioned to benefit from this growing demand, and this order is just the beginning of its journey in the manganese market.”

Elcora’s Atlas Fox Project in Morocco – Beni Mellal Manganese Deposit/Mine and the Ouarzazate Project (including the Omar Mine)

Elcora’s Atlas Fox Project in Morocco is rich in manganese. It is comprised of the Beni Mellal Manganese Deposit/Mine and the Ouarzazate Project (including the Omar Mine).

At the Beni Mellal concessions, Elcora has a 10-year Exploitation License. This manganese concession contains a surface deposit mine that operated during French colonial times. Elcora plans to leverage on-site infrastructure with ore ready for processing. In Q4 2023 Elcora plan to build a gravimetric concentrator to upgrade raw ore content (30% Mn) to 50% Mn and increase mine production to 2,500 to 3,000 t/month of 50% Mn concentrate.

At the Ouarzazate Project Omar Mine, Elcora has acquired exclusive mining rights and an option to purchase the 16 km² manganese mining concession. The concession contains both a surface deposit and underground mine. Elcora is leveraging on-site infrastructure and has existing manganese ore piles of approximately 6,000 tonnes that are ready for processing. Elcora plans to ramp up mining production to 2,500 tons per month at the Omar Mine.

Elcora’s overall manganese ore production capacity is targeted to be more than 5,000 metric tonnes per month from the above concessions.

Atlas Lion Vanadium Project in Morocco

Elcora owns the Atlas Lion Vanadium Project (304 Km2) concessions in Morocco. Elcora plans to further explore and develop these concessions with the goal of producing vanadium.

Elcora’s next steps for mining manganese and vanadium in Morocco

Source: Elcora company presentation

Closing remarks

In total, Elcora currently owns seventeen polymetallic (vanadium, lead, other), one manganese (and one option to purchase) and one copper licences/concessions in Morocco. 

Elcora is making strong progress on its goal to become an integrated battery metals producer. The Company already has the technology and facilities to purify high-quality battery metals (notably spherical graphite, graphene, and anode powder) and is now working on the mining side with manganese and vanadium (noting they already have a graphite mine). The Atlas Fox Project in Morocco has commenced stockpiled manganese ore sales and plans to ramp up manganese ore production from its concessions to 5,000/t per month. Following this will be development work and potentially production from the Atlas Lion Vanadium Project, also in Morocco.

Elcora Advanced Materials Corp. trades on a market cap of only C$18 million, suggesting this may potentially be just the beginning for Elcora.




Ford Enters a ‘Brave New World’ in Securing Lithium for Battery Gigafactories to Drive EV Production Surge

Ford Motor Company (NYSE: F) hosted its investor event on Monday and it would appear that in a single investor day presentation the Company has gone from worst to first when it comes to securing battery-grade lithium supplies to scale up its electric vehicle production. I’m pretty sure all these deals didn’t come to fruition over the weekend, but they sure made a splash when they were presented on Monday.

In total, Ford announced deals with five separate companies sourcing lithium from all over the world, including Quebec, Chile, Argentina, Australia, and a few U.S. locations sprinkled in for good measure. These latest supply deals announced by Ford complement the ioneer Ltd (ASX: INR | NASDAQ: IONR) contract signed in July 2002.

Ford Investor Day Lithium Announcements

According to the Ford Investor/Analyst Day presentation transcript (yes I scanned most of the 78 pages and know way more about Ford than I ever wanted to know), they’ve now sourced about 90% of the nickel and the lithium to meet their future capacity targets, including producing 2 million electric vehicles (EVs) by 2026. On Monday, the Company announced lithium agreements with 3 of the top producing major global suppliers – Albemarle Corporation (NYSE: ALB), Chile’s Sociedad Química y Minera de Chile S.A. (aka “SQM”)(NYSE: SQM), and Nemaska Lithium.

Nemaska is a joint venture backed by Livent Corporation (NYSE: LTHM) and the investment arm of the Province of Quebec. According to Ford, these are some of the largest lithium producers in the world with the best quality, existing capacity, and IRA compliance (although Albemarle does have plenty of Chinese processing capacity but we’ll assume Ford knows that).

US-Based Lithium Development Deals

Coupled with these deals with major players to provide stability to its plants, Ford is also investing in U.S.-based development projects through agreements with Compass Minerals International, Inc. (NYSE: CMP), EnergySource Minerals LLC (private), and the previously announced deal with ioneer.

The interesting thing about these investments is that Ford is basically pursuing promising technology that has yet to be proven at scale. Ford claims they are developing extraction technologies to further diversify the industry, but if they are betting on the right horse, it could certainly give them a leg up on the competition.

A Bet on Direct Lithium Extraction Technology

Specifically, we are talking about direct lithium extraction (DLE) technology. The Holy Grail for lithium extraction as it seeks to extract the white metal from brine using filters, membranes, ceramic beads, or other equipment that can typically be housed in a small warehouse. It would enable miners to boost global lithium production with a footprint far smaller than open-pit mines and/or evaporation ponds, which are often the size of multiple football fields. 

Compass and ESM are using ESM’s proprietary ILiAD™ adsorption technology, which is a DLE technology that competes with what ioneer and Lithium Americas Corp. (TSX: LAC | NYSE: LAC) are pursuing at their respective projects. The pursuit and potential success of DLE technology is easily an article in itself, and probably well above my pay grade to do it justice.

FIGURE 1: Giga Factory Locations

Source: Ford Investor Day Presentation (May 22, 2023)

Ford to Build 5 New EV Battery Giga Factories

So we’ll circle back to the Ford story and talk about why they’ve locked in several large, multi-year lithium supply contracts. Ford is building 5 new giga factories to produce batteries, with the first two, located in Kentucky and Tennessee, on track to open in 2025. Another plant, in Marshall, Michigan, will be dedicated to producing battery cells using LFP (lithium iron phosphate) technology.

With respect to the LFP facility, it helps explain one of the lithium announcements noted above, the SQM deal which supplies lithium carbonate. Lithium carbonate is required for LFP batteries versus lithium hydroxide, which is the primary component for the current generation of lithium-ion batteries. Ford now feels it has control of its value chain. Instead of relying on a cell supplier, Ford can now move material around where they need it, so If they wanted to flex more into LFP and use more lithium carbonate, no problem. If the Company wants to swing more towards hydroxide, it can also do that.

Final Thoughts

Granted this isn’t original thinking as Elon Musk was the first one out of the gates lining up sources of lithium (and other critical materials) for Tesla, Inc. (Nasdaq: TSLA), and in January, General Motors Company (NYSE: GM) signed a deal with the aforementioned Lithium Americas.

Nevertheless, it seems now that virtually all North American automakers are securing supplies of battery materials to boost EV output as demand for EVs continues to grow, and to take advantage of U.S. tax credits.

It would appear automakers are entering a ‘Brave New World. Which, ironically is a dystopian novel written in 1931 by Aldous Huxley, where the citizens of the World State substitute the name of (Henry) Ford, founder of the Ford Motor Company, wherever people in our own world would say Lord. We shall see if the Ford Motor Company of 2023 will become the messiah of EV production.




Tesla’s Lithium Refinery in Texas Ushers in a New Era for Critical Minerals Refining in the US

As announced on May 8, 2023, Tesla Inc. (NASDAQ: TSLA) has recently broken ground on their new lithium refinery in the greater Corpus Christi area of Texas, USA. The new, more than US$1 billion Tesla refinery will produce battery-grade lithium hydroxide (“LiOH”) with targeted commissioning by the end of 2023. Given Elon Musk’s track record, it may be more likely to shift into 2024.

The significance is that the new Tesla LiOH refinery will kickstart a new chapter for U.S. critical minerals refining in North America.

Tesla’s Texas refinery will kick start a new chapter for U.S. critical raw materials refining in North America, starting with lithium

Currently, there are zero LiOH refineries in North America. Most are in China and there are two new refineries in Western Australia.

A Tesla LiOH refinery will have huge follow on benefits for Tesla and the North American supply chain, including:

  1. North American or South American lithium spodumene mines would be able to send their spodumene for processing to the Tesla LiOH refinery in the USA. This is a huge plus for all of these lithium projects as otherwise their material would have been sent to China for processing. This, therefore, supports a new lithium supply chain that can be independent of China.
  2. Tesla can secure LiOH without outside help. Tesla currently has a spodumene off-take supply agreement with Piedmont Lithium Inc. (NASDAQ: PLL | ASX: PLL) from their joint venture with Sayona Mining Limited (ASX: SYA | OTCQB: SYAXF) at the North American (“NAL”) Lithium Mine in Quebec, Canada which has only very recently begun spodumene production. It would seem a rather obvious next step that Tesla would look to secure more lithium spodumene off-take as they grow their LiOH production. Tesla does have an off-take agreement with Liontown Resources Limited (ASX: LTR) from their Australian Kathleen Valley Project. But Tesla will need much more spodumene if it wants to produce ever greater amounts of lithium. We know Tesla plans to ramp up to 20 million electric cars produced per year by 2030 and yesterday Elon Musk revealed Tesla could potentially grow their energy storage business to 500GWh per year. Elon Musk stated at the Tesla 2023 Shareholders Meeting (52 min mark of the video): “The Tesla Megapack is now more competitive than a natural gas peaker plant……growing faster than our vehicle sales….I think long term……stationary battery pack activity will be in excess of 500 GWh a year…the demand is quasi infinite. Tesla plans to use lithium iron phosphate batteries, so the key element for Musk to source would be lithium.
  3. Other companies will follow Tesla’s lead, not only in lithium but in several other battery materials, notably nickel, cobalt, and graphite.

Tesla Texas refinery to do more than just lithium

A small, yet important, part of the announcement stated: “In the future, we expect this facility to also process other intermediate lithium feedstocks, including recycled batteries and manufacturing scrap.

This suggests Telsa also plans to get into the lithium-ion battery recycling business. That part may also tie in nicely with yesterday’s announcement of JB Straubel being appointed to join the Tesla Board. JB Straubel is a co-founder of Tesla, but more recently he also founded and is the CEO of Redwood Materials, Inc., a company focused on recycling lithium-ion battery materials to source valuable metals such as cobalt, nickel, copper, and lithium.

The faster we can make battery packs, the faster we can move to a sustainable energy economy

At the Tesla 2023 Shareholder Meeting, Elon Musk stated (32 min mark): “The faster we can make battery packs, the faster we can move to a sustainable energy economy. That’s the fundamental limiting factor.”

The chart below reinforces this showing in simple terms what Elon Musk described yesterday that solar & wind production needs to increase by 3x/year, battery production by 29x/year, and battery electric vehicle production by 11x/year.

Elon Musk has previously stated that the limiting factor to making more batteries is lithium. Now we can see why Tesla is spending more than US$1 billion to get into the lithium refining business. Lithium mining and then refining are the choke points to achieve a 100% renewable economy.

FIGURE 1: Tesla says solar & wind annual production needs to increase by 3x, battery annual production by 29x, BEV annual production by 11x (from 2022 levels)

Source: Tesla 2023 shareholder meeting

Closing remarks

A lot is happening very fast in the world of renewable energy and the electrification of transport.

Tesla Master Plan 3 and 2023 Shareholder Meeting has clearly defined what is needed to be done to move to a sustainable energy future. All of this is achievable and Tesla is way out in front with ever-increasing electric vehicle and stationary energy storage/solar factories and now a Tesla lithium refinery (under construction) and soon a battery recycling facility.

Tesla is rapidly gaining market share in the new renewable energy economy and is now securing their supply chain with a U.S. lithium refining facility.

May has been magnificent and the decade ahead looks to be very promising for investors focused on the greatest trends of our time – Renewable energy (solar/wind), lithium-ion battery energy storage, and electrification of the transport sector.

FIGURE 2: Schematic of Tesla’s under-construction lithium refinery at Corpus Christi, Texas, USA

Source: Tesla 2023 shareholders meeting (video)



Lithium Prices Recover as China EV Sales Rebound Reigniting Investor Interest in Albemarle & Tesla

The first quarter in 2023 was a rough period for lithium stocks as the China lithium carbonate spot price crashed lower. However, the second quarter is looking a lot better.

FIGURE 1: China lithium carbonate spot prices appear to be rebounding after hitting a low in late April 2023

Source: Trading Economics

Global and China EV sales recovered strongly in March and April 2023

March 2023 global plugin electric car sales were over the 1 million mark and were the ‘second best month ever’. This was due to very strong sales in China and Europe, with the USA also contributing. It is already looking like the panic sell-off in lithium stocks has been overdone with stocks rebounding higher in the past 3 weeks.

Reports have it that Chinese lithium consumers are buying again after running down inventories in Q1/2023. Certainly, China plugin electric car sales have rebounded very strongly with over 500,000 sales in March and approximately 600,000 in April 2023. Those sales numbers are a huge increase over China’s January sales which fell 8% Year-over-Year to 343,000 as new energy vehicle (“NEV”) subsidies expired.

Lithium stocks rallying again

Strong EV sales in China are leading to early signs of a China lithium price recovery. Lithium contract prices remain much higher than spot prices reflecting the past lithium price rise and the strong outlook for lithium demand in 2023 and beyond.

As shown on the chart below, February, March, and April saw the leading lithium stocks (Albemarle Corporation (NYSE: ALB), Sociedad Química y Minera de Chile S.A. (NYSE: SQM), Livent Corporation (NYSE: LTHM), and Pilbara Minerals Limited (ASX: PLS)) follow spot prices lower; however, in May we can see a potential price recovery starting (green arrow in chart below).

FIGURE 2: Leading lithium stocks have been moving higher in May buoyed by improving EV sales and lithium prices (NYSE: ALB, NYSE: SQM, NYSE: LTHM, ASX: PLS)

Source: Yahoo Finance

Albemarle remains very positive on the lithium market with takeover offers and expansion plans

During the lithium price collapse of early 2023, Albemarle was moving in the opposite direction as it made several key announcements that indicated its strong belief that the lithium market would rebound. Below is a brief summary:

Furthermore, Albemarle announced on May 3, a net sales increase of 129% for Q1/2023. Albemarle CEO Kent Masters commented:

“Compared to last year, first quarter net sales more than doubled, adjusted diluted earnings per share more than quadrupled providing a robust start to the year. … We see strong sales volume growth for the rest of the year but have modified our guidance to reflect softening lithium market pricing. We remain confident in the underlying market strength of our world-class asset base and our long-term growth strategy.”

Albemarle knows the lithium market better than most, especially given it has been the industry leader for over a decade. Currently, they have numerous expansion plans globally including:

  • The Salar Yield Improvement Project in Chile;
  • The above-mentioned Kemerton trains III & IV lithium hydroxide production expansion in Australia;
  • An under-construction lithium conversion facility in Meishan China; and,
  • The Kings Mountain mine development in the USA that will eventually feed their planned new South Carolina lithium processing facility.

Added to these items is the attempted takeover of Liontown Resources Limited (ASX: LTR) for A$2.50 or US$1.66 per share in cash, which values Liontown at A$5.2 billion or US$3.4 billion on an enterprise basis, at the time of the offer.

Both Bank of America and Scotiabank have recently upgraded Albemarle. The latter assigned a US$250 price target, which is well above the current price of US$195 at the time of writing.

Closing remarks

Several negative events in early 2023 caused a dramatic fall in China spot lithium carbonate prices. The lithium price had increased over 10x and was due for a fall, with Q1 typically being a weak quarter due to seasonal impacts causing lower EV sales.

Discussions about sodium-ion batteries did not help either. As it turns out, market participants are now realizing that lithium demand is still very strong, despite some short-term volatility. Sodium-ion batteries, at best, will have limited use cases in energy storage, and cheap, small EVs, mostly sold in China, due to inferior volumetric energy density.

For investors, the recent market dip in lithium stocks may prove to be a good time to go shopping. The long-term demand wave for lithium is a supercycle with 2037 demand forecast to be 35x higher (according to Trend Investing) than 2020 levels.

Certainly, Albemarle, the lithium leader, remains extremely bullish on the lithium sector with a multi-billion dollar takeover offer and expansion plans.

The EV and stationary energy storage booms are here and will only grow stronger this decade. The Tesla Inc. (NASDAQ: TSLA) Master Plan 3 reports that we need 240 TWh (240,000 GWh) of energy storage for the world to run on 100% renewable energy, most from lithium-ion batteries. Given global lithium-ion battery production in 2022 was only about 700 GWh you can draw your own conclusions. Albemarle and Tesla already have shown us what they think. The latter is breaking ground on a new billion-dollar lithium refinery in Texas this week.




EV Sales Expected to Grow in 2023 Despite a Slow Start in Q1, Now Fueled by Tesla-Led Price Wars

After a stellar 2022, which saw global plugin electric car sales increase by 55% year on year (“YoY”) to 10.522 million and reach approximately a 13% market share, what will 2023 bring? We already saw a soft start to the year in January, which resulted in a Tesla-led price war. February and March sales of electric cars have seen some improvement.

Overall in Q1/2023, global plugin electric car sales are growing YoY, just not as fast as in 2022. BloombergNEF is forecasting 13.6 million deliveries in 2023, compared to Trend Investing’s forecast of 14.35 million (up 36% YoY).

Auto Shanghai 2023

Looking at Auto Shanghai 2023, which is on now in China, it appears that interest in EVs is at an all-time high, with 70 of the 100 new models on display being electric. China continues to dominate global electric car sales, selling almost 60% of global electric cars in 2022.

Image 1: Auto Shanghai 2023 – Embrace the new era of automobile industry

Source: Auto Shanghai 2023

Q1/2023 sales

Global plugin electric car sales in Q1/2023 are estimated to have reached approximately 2.3 million to 2.4 million units (January 662,000, February 812,000, March approximately 850,000 (estimate)). At first glance, it may seem like the yearly targets of 13.6 million or 14.3 million look out of reach, but this may not be the case. The first quarter is always the slowest quarter of the year and it was negatively impacted this year by the end of Chinese Federal subsidies and Covid-19 impacts in January in China.

A lot has happened since then, including a ‘price war’, where EV car manufacturers are significantly discounting prices to secure growth and market share. Reuters recently reported March China sales stating: “Sales of new energy vehicles (NEVs), which include pure battery electric cars and plug-in hybrids, rose 21.9% in March and accounted for 34% of the month’s sales…….More than 40 brands have joined a price war started by Tesla this year.”

Q1/2023 sales by manufacturing group

BYD Co (HK: 1211 | OTCPK: BYDDF) remains the global sales leader having sold 552,076 new energy vehicles (“NEVs”) in Q1/2023. BYD’s sales are up 92.81% YoY.

Tesla (NASDAQ: TSLA) is at number two globally with 422,875 sales in Q1/2023.

Next in terms of Q1 sales is Volkswagen Group (Xetra: VOW | OTCPK: VWAGY) followed by Geely Automobile Holdings Ltd. (HK:0175 | OTCOK: GELYY).

In terms of the better-known U.S. brands, they are still a very long way behind. For example, General Motors (NYSE: GM) sold 20,670 electric cars in Q1/2023 and Ford (NYSE: F) sold only 10,866. Rivian (NASDAQ: RIVN) sold 7,946 electric pickup trucks in Q1/2023.

The Chinese upstarts Li Auto (52,584 sales), Nio (31,041 sales), and XPeng (18,230 sales) performed ok but failed to deliver significant numbers in Q1/2023.

A conclusion from all of the above is that the big are getting bigger, BYD and Tesla dominate, and Volkswagen Group, Geely, and others are all chasing.

Image 2: Tesla has slashed their prices in 2023 – Model 3 now sells in the USA for US$39,990, and much less after various incentives

Source: M. Bohlsen

2023 EV trends – Price wars and U.S changes to the IRA and the EPA proposed aggressive new ‘clean vehicle’ standards

The emerging trend of 2023 in a sluggish global economy is an all-out ‘EV price war’. Fierce pricing competition has emerged in order to boost sales growth. Falling commodity prices (notably lithium) are helping battery prices to come down and hence also helping EV makers to pass on cost savings.

The big winner so far in 2023 is the consumer. Tesla ‘slashed prices‘ in 2023 thereby starting the price war. You can now buy a Tesla Model 3 RWD in the USA for US$39,990, which drops by the federal tax credit of US$3,750 for eligible buyers (and a further US$2,000 for California eligible buyers). Tesla has the highest auto margins and can afford to cut prices and still remain very profitable (Q1 net GAAP income fell 24% YoY, but remains profitable with 19.3% gross margin).

BYD recently launched their small electric car ‘Seagul’ at an astonishingly low price (from approximately US$11,400) in China, receiving 10,000 new orders on the first day.

The incumbent ICE companies and lower volume manufacturers/startups are the ones who will really feel the pinch, with many of them making a loss on their EV sales. At this rate, 2023 may see a few smaller EV startups go bankrupt and potentially some industry consolidation.

Another key trend in 2023 is the changes to the Inflation Reduction Act (“IRA”). As reported by Bloomberg on April 18, 2023: “Only 10 electric and plug-in hybrid vehicles will qualify for $7,500 federal tax credits in the US after stricter battery-sourcing rules take effect and render most plug-in models ineligible……General Motors, Tesla, and Ford Motor all have at least one EV that will qualify, while Ford and Stellantis NV (NYSE: STLA) each have one eligible plug-in hybrid model….”

In a further twist of the knife to the internal combustion engine (“ICE”) manufacturers, it was reported in April 2023 that the EPA proposes aggressive new ‘clean vehicle’ standards, stating: “The agency projects that EVs could account for 67% of new light-duty vehicle sales and 46% of new medium-duty vehicle sales in 2032, bolstered by the EPA proposals.”

Closing remarks

Global electric car sales are off to a sluggish start in 2023, but the recent price war looks to be helping with sales momentum growing in February and March 2023. Tesla appears to be determined to grow EV sales volumes at an average of 50% YoY this decade. Given Q1/2023 growth was 44% YoY, it looks like Tesla will continue the price war for some time.

In terms of 2023 EV trends, it looks like being a year of reckoning. BYD and Tesla are getting stronger and the ICE laggards and struggling EV startups are being left behind. At this rate, we may see some casualties before year end. At least the EV consumer is now getting some great deals!




Telsa Unveils ‘Masterplan 3’ and Ways to Invest in Renewable & Energy Transition Companies

Tesla‘s (NASDAQ: TSLA) Master Plan 3 was released in detail on April 5, 2023, and it gives the world a road map on how the world can transition to a clean sustainable energy future. It is arguably one of the most important documents ever released in history.

Key pillars of the plan include re-powering the existing grid with renewables (including solar, wind, geothermal, and hydro), switching to electric vehicles (“EVs”), switching to heat pumps, and some use of green hydrogen for high-temperature applications. Elon Musk also supports smart nuclear as a good base load power option, especially when compared to fossil fuel power, especially coal.

To achieve this, the world needs to build out a new infrastructure and a key part is stationary energy storage, mostly using batteries. Musk’s Master Plan 3 suggests we need a massive 240 TWh of energy storage globally to support both energy production and EVs. To get some perspective on this number, in 2022, the world produced only about 700 GWh of lithium-ion batteries. 240 TWh is equal to 240,000 GWh, which is 342x the current 700 GWh.

Of course, other energy storage apart from lithium-ion can be used, but certainly, the electric transport sector will rely on lithium-ion and it is estimated to need 112 TWh of the total 240 TWh needed. If the world was to steadily grow and reach 20TWh per annum (“pa”) of new energy storage production starting in 2030, then it would take 12 years (240/20=12) to reach the end goal sometime around 2042. In terms of costs, the plan suggests it would cost about US$10 trillion, which is only 10% of the world’s 2022 GDP. Also because electrification for transport and heat pumps are much more efficient, then the world would only need to produce 1/2 as much energy.

Tesla Master Plan 3 – The world needs 240 TWh of energy storage to become clean energy sustainable and avoid using fossil fuels

Source: Tesla Master Plan 3 (April 5, 2023)

Investing in renewable & energy transition companies

One way to cover many of the areas discussed above is via some or all of the Sprott ETFs shown below:

Some other EV, battery, and battery metals ETFs include:

The fact that renowned investor Eric Sprott has recently added several new energy transition ETFs bodes well for the various sectors. It also helps individual and professional investors gain broad access to these markets via a single ticker.

Another way to invest in these themes is via companies covered by InvestorIntel.com. Probably the best place to start is looking under the Critical Minerals & Rare Earths tab and the ESG & Cleantech tab.

EIA data and forecasts showing solar and wind to grow the fastest to 2050

Source: U.S. EIA Annual Energy Outlook 2020

Closing remarks

Tesla continues to lead the world toward a clean and sustainable energy future. Their Master Plan 3 gives a concise and detailed picture of what needs to be done. It details solar and onshore wind as the two cheapest forms of energy production (page 19) and lithium-ion batteries as the cheapest energy storage (page 18) solution.

The clean energy transition has already begun with solar and wind as the fastest-growing new energy generation globally and battery energy storage global growth is set to double in 2023. To meet all the 240 TWh of global energy storage needed, lithium-ion battery capacity would need to grow by several hundred times. The global electric vehicle market share reached 13% in 2022 and is a key part of this megatrend.

The global energy transition and transport electrification is the biggest trend of our time, at least until the full build-out is completed by approximately 2050. Investors should embrace the change and understand it is inevitable.

Our children, grandchildren, and future generations will also want to enjoy a clean planet one day.