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The European Union is fast becoming the second key battleground for electric vehicles. A regulatory push to reach its climate goals is forcing the adoption of electric vehicle strategies for carmakers operating in the EU. This week Nissan and the PSA Group announced renewed efforts specifically targeting Europe as a key market for their electric vehicle strategies.
Nissan announced a plan for an “EV Ecosystem” in Europe at the ‘Nissan Futures 3.0 – The Car and Beyond’ event in Oslo. The plan is centered around four key pillars which are the launch of new electric vehicles, additional infrastructure investment, battery charging and home storage advances, and a revolutionary new vision to give Nissan customers free power for their EV using its unique bi-directional charging technology.
Nissan launched a Europe specific LEAF version, the ’2.ZERO’ during the event and announced the new Nissan e-NV200 offering a 60% improvement in the range allowing for 100% electric last mile delivery.
The Japanese automaker will expand its CHAdeMO charging network from 4,600 chargers to 5,600 over the next 18 months. Improvements were also announced in charging technology which includes:
Group Renault unveiled its Drive the Future plan for the period 2017 – 2022 in which it targets EV leadership. It is significant that the Group plans to bring 21 new vehicles to the market in the period of which eight are pure electric models and twelve electrified. The plan follows its “Drive the Change” plan and is built around the Group’s vision of sustainable mobility for all, today and tomorrow. Key aspects of the plan relative to EVs include:
In related news, PSA Group’s recently acquired, Opel’s head of development Giles Le Borgne in an interview with Automobilwoche stated – “We will gradually start using PSA platforms and engines for the Opel model lineup.” Appart from the obvious job losses it is safe to assume that we will see more EVs from the brand now that its free from GM‘s limited pursuit of the technology to now.
Some Chinese carmakers have also identified Europe as a key market and are grabbing the opportunity formulating strategies to take advantage of the lead they have due to their own countries aggressive EV regulations. Recently we reported that Chery would create an EV brand for Europe and this week SAIC announced the launch of its Maxus brand in Europe by 2019. SAIC made its intent clear with the launch of the Maxus EV80 electric LDV for Europe.
In support of its regulatory push, the European Union will host a meeting of industry heads from the auto and battery sectors in the coming week to discuss developing battery manufacturing hub to compete Asian and the U.S. markets.
Following on the recent announcement that the Tata-owned company will introduce EV versions of all Jaguar and Land Rover models from 2020 the British automaker this week unveiled the Range Rover Sports P400e PHEV, the company’s first electrified model. The Range Rover Sports P400e PHEV, available in 2018, has a range of 31 miles (50km) and will be priced at £70,800.
How different is the news we report today than that of a year ago? In 2016 the general topic when reporting on large US automakers EV strategies was them downplaying electric vehicles as a small niche. This week the USA’s two largest automakers (historically, before Tesla unseated them on market cap) announced strategy shifts towards more aggressive EV development.
In a press release Mark Reuss, General Motors executive vice president of Product Development, Purchasing and Supply Chain said “General Motors believes in an all-electric future. Although that future won’t happen overnight, GM is committed to driving increased usage and acceptance of electric vehicles through no-compromise solutions that meet our customers’ needs.”
The plan towards an All Electric Path to Zero Emissions recently announced by CEO Mary Barra includes two new pure electric cars in the next 18 months based on learnings from the Chevrolet Bolt, ultimately reaching 20 new all-electric models by 2023. The plan also includes Fuel Cell Electric Vehicles starting with SURUS — the Silent Utility Rover Universal Superstructure — a fuel cell powered, four-wheel steer concept vehicle on a heavy-duty truck frame that’s driven by two electric motors. With its capability and flexible architecture, SURUS could be used as a delivery vehicle, truck or even an ambulance — all emissions free. The company also announced that it more than doubled its autonomous vehicle test fleet in California.
Ford‘s new CEO, Jim Hackett this week came out with a complete strategy shift, rethinking its predecessors One Ford strategy in a bid to play catchup on its competitors in the electric vehicle market. The shift aims to reduce cost by $14 billion, leverage partnerships and invest in EVs and trucks. The highlights from the announcement as presented in the company’s press release are:
Accelerating the introduction of connected, smart vehicles and services customers want and value. By 2019, 100 percent of Ford’s new U.S. vehicles will be built with connectivity. The company has similarly aggressive plans for China and other markets, as 90 percent of Ford’s new global vehicles will feature connectivity by 2020.
Rapidly improving fitness to lower costs, release capital and finance growth. Ford is attacking costs, reducing automotive cost growth by 50 percent through 2022. As part of this, the company is targeting $10 billion in incremental material cost reductions. The team also is reducing engineering costs by $4 billion from planned levels over the next five years by increasing use of common parts across its full line of vehicles, reducing order complexity and building fewer prototypes.
Allocating capital where Ford can win the future. This starts with the company reallocating $7 billion of capital from cars to SUVs and trucks, including the Ranger and EcoSport in North America and the all-new Bronco globally. Ford also has plans to build the next-generation Focus for North America in China, saving capital investment and ongoing costs. Further, Ford is reducing internal combustion engine capital expenditures by one-third and redeploying that capital into electrification – on top of the previously announced $4.5 billion investment.
Embracing partnerships. Ford will continue to leverage partnerships, remain active in M&A and collaborate to accelerate R&D. The company recently announced it was exploring a strategic alliance with Mahindra Group as it transforms its business in India, and Zoyte with the intention of developing a new line of low-cost all-electric passenger vehicles in China. When it comes to autonomous vehicle development, the company recently announced a relationship with Lyft to work toward commercialization and a collaboration with Domino’s Pizza to research the customer experience of delivery services.
Expanding electric vehicle revenue opportunities. The company recently announced a dedicated electrification team within Ford, focused exclusively on creating an ecosystem of products and services for electric vehicles and the unique opportunities they provide. This builds on Ford’s earlier commitment to deliver 13 new electric vehicles in the next five years, including F-150 Hybrid, Mustang Hybrid, Transit Custom plug-in hybrid, an autonomous vehicle hybrid, Ford Police Responder Hybrid Sedan, and a fully electric small SUV.
The Chinese automaker Great Wall Motors (GWM) acquired a 3.5% stake in Australian Lithium miner, Pilbara Minerals for $22 million in a bid to secure lithium supply for its EV strategy. To date, GWM has been one of the slower movers in the Chinese EV sector, but the purchase signals a more aggressive stance.
After losing a tender to supply the Indian government with electric vehicles to Tata, Mahindra and Mahindra amped up its investment in the sector by earmarking $600 million (Rs 4,000 crore) over the next three to five years. The investment will be in four parts, namely:
Light Delivery Vehicles is hotting up as the next growth market in the EV sector. Recently we have seen some new and improved models announced in this vehicle class. The drive to make the last mile 100% electric is a low hanging fruit and an obvious target for regulators enforcing emission control in cities. Already Chinese manufacturers have electrified a host of existing combustion LDVs. This week wattEV2buy published a list of over 1,400 special vehicles in China which consists mostly of cargo vans, panel vans, and multi-purpose vehicles.
This week big manufacturers SAIC and Nissan announced the launch of two new electric LDVs. Nissan unveiled the new e-NV200 with a range of 280km (175mi). SAIC unveiled the Maxus EV80, available as a panel van and a chassis cab. The Maxus EV80 has a cargo area length of 3300 mm, width of 1770 mm and height of 1710 mm, resulting in a total volume of 10.2 m3 accessible through wide-opening rear and side doors and capable of a maximum payload of 950 kg (2,100 lbs) and a maximum towing mass of 750 kg (1,650 lbs). The EV80 has a range of 200 km (124 miles) and charges in two hours. The Maxus EV80 LDV comes with a three-year bumper-to-bumper warranty and a battery warranty of five years or 100,000 km.
Flowing from Ford‘s strategy shift announced above it transpired that the US automaker would focus on developing EV vans for the Chinese market in an attempt to play catch-up.
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A guide to investing in lithium, nickel, and cobalt used for electric vehicles as it spurs another gold rush as mining companies scramble for “modern” resources such as lithium (white petroleum as its now aptly called), nickel, and cobalt.
Lithium’s properties include being the lightest metal on the Periodic Table which has the highest electrochemical potential of all metals. Lithium is a soft silvery metal that reacts immediately with water and air. Some analyst predicts that current lithium demand would rise from 16,500 to between 120,000 to 250,000 tons by 2025 to feed the 14 battery mega factories that are developed, mainly in China. Rising lithium prices in the short term are not seen as a threat to the electric vehicle sector, as most large battery manufacturers indicated that they had fixed forward prices when we asked them to comment. Lithium prices are set through direct negotiations, as no terminal or spot market exists for the commodity. Investors should be careful not to get to fixated on sentiment and remind themselves that lithium batteries have been around for some time for use in cell phones and other handheld devices. Batteries for these devices, up till now, make up nearly 90% of demand supplied by the likes of Samsung and LG Chem. Lithium is not a scares commodity, and production capacity should increase over the longer term to keep up with the growth in demand due to electric vehicles. Lithium mining is also not an expensive venture. Lithium carbonate is extracted through an evaporation process from a brine found in salt flats. A risk with lithium is that the biggest deposits are concentrated in South America, especially Bolivia, where a handful of mining companies can control prices.
Commodities that shows a bigger opportunity on the upside include nickel, copper, and cobalt. Analyst comments remained bullish on these commodities at the recent African Mining Indaba, held in Cape Town, South Africa. Although Africa also has lithium deposits, its mostly found in rock and more expensive to extract. These deposits are also better suited for the technical applications such as ceramic and glass industries, than chemical applications such as batteries. Reuters (February the 14th 2017) reports that investors are scrambling for physical stocks in cobalt, a key ingredient for electric vehicle batteries. By adding cobalt to the chemistry of lithium batteries, car manufacturers can gain range. Cobalt is a buy product of copper, where investors are exposed to larger risk and cost if they invest in mining companies, such as Anglo American, Glencore or BHP Billiton to gain exposure in cobalt. Therefore the only direct investment is to buy and stockpile physical cobalt, a process which has a high barrier of entry, excluding smaller investors. A further concern is that most of the world’s cobalt comes from the Eastern Congo, a war-torn region of the Democratic Republic of Congo (DRC), close to Rwanda and Burundi, whose rebels also use the region as a springboard for causing trouble. The political environment in the DRC has deteriorated and will not improve soon as the country prepares for elections by the end the decade.
Investors trying to make a mint out of the electric vehicle boom should also keep a constant eye on how technology and battery chemistry change in this new and fast-moving sector, creating new opportunities for certain metals or bubbles for those becoming outdated. Let the history of investing in solar cells not repeat itself for battery investors.
Please leave a comment on your best or worst performing electric vehicle related stock pick below.
Picture – Source NY Times
Ford debuted it’s next-generation Fusion Hybrid Autonomous development vehicle this week. The second generation of the vehicle sports more production ready controls and LiDar sensors on top of an improved computer hardware platform. Improved field of vision on the sensors allowed Ford to have only two sensors as opposed to four in the first generation. The second generation follows the first, introduced three years ago. The company aims to have an SAE Level 4-capable vehicle commercially available by 2021 for ride-hailing and sharing purposes. Ford will also expand its test fleet, currently operational only in California to its home state, Michigan.
Lamborghini, a Volkswagen company, announced this week that it plans to include a PHEV version of its first SUV since the LM002, the Urus when its released in 2018. The auto manufacturer is also rumored to work on an all-electric vehicle, named the Vitola, which will use the Porsche Mission E platform.
The controversial LeEco announced the groundbreaking of its plant in the city of Hangzhou, Zhejiang Province China. LeEco is entwined between Faraday Future and the LeSee electric vehicle manufactured by LeEco. Both companies were founded by Chinese businessman Jia Yueting. Both businesses are known for making bold statements and big ticket announcements just to be followed by press reports of cash flow and funding problems. The announcement comes at a time when Faraday Future is battling to break ground on its plant in Northern Los Angeles. The company could not even pay the $21 million deposit to Aecon despite being offered $300 million by the local authorities for building the assembly plant there. LeEco has also partnered with Aston Martin on the RapidE, where it will help with the development of the zero emission technology. Faraday Future is said to hold the patents to the technology, but recent reports state that the technology is in fact held by a separate company in the Cayman Islands, creating insecurity for investors and borrowers..
In another attack on Tesla by the old guard, as the State of Missouri rejected its dealership license renewal. The reason being a ruling by Circuit Judge Green in a case brought against the Missouri revenue department by the Missouri Auto Dealers Association for allowing the license in 2015. Tesla prefers to use a direct sales model due to the notorious inability of traditional dealers to sell electric vehicles. Tesla will be forced to close shop in the State come January the 1st 2017.
Miners are scrambling for “modern” resources such as lithium, nickel, and cobalt used in the electric vehicle manufacturing process. A reporter, Marcus Le Roux explored the various metals and their potential supply constraints and sources in the Australian. Most interestingly are the place which copper plays within the electric vehicle industry and the expectation that current lithium demand would rise from 16,500 to between 120,000 to 250,000 tons by 2025 to feed the 14 battery mega factories that are developed, mainly in China.