Surprise! Electric Vehicle global sales continue to rise in spite of pandemic - InvestorIntel

Surprise! Electric Vehicle
global sales continue to rise
in spite of pandemic…
COVID-19 is causing huge disruptions to the global economy.
Today I look at how COVID-19 (coronavirus) is impacting global
electric vehicle (EV) sales and the EV metals supply chain.
This includes a review of the EV metals: lithium, cobalt,
graphite, nickel, neodymium and praseodymium

Global electric vehicle (EV) sales

Somewhat surprisingly global electric car sales actually rose
by 16% in February, compared to February 2019. The results
were a mixed bag. China’s electric car sales plummeted 65% YoY
and Europe sales boomed, rising a massive 111% YoY.

China usually makes up about 50% of global EV sales, and in
February 2020 much of China was locked down due to
coronavirus. This explains the dramatic fall in sales. Europe
may follow to some degree in March EV sales, as coronavirus
then moved to Europe during March, and China improved.

Also in March, we have seen a number of high profile EV
manufacturers such as Tesla and Volkswagen close down some of
their factories. This will impact March and April sales to
some degree.

Tesla temporarily suspended production at Freemont and New
York, but said superchargers, Nevada Gigafactory and their
service centers would remain open. Tesla even started sourcing
ventilators and donated hundreds of ventilators to California
and New York City, as they began Model Y deliveries in the US.

My expectation is we will see weaker March EV sales from
Europe, but stronger from China. As the coronavirus fades away

(hopefully before mid 2020) we will see very strong EV sales
by H2, 2020 and into 2021.

Tesla Model Y US deliveries began in March 2020 amid the
coronavirus chaos

Impact on EV metals

The key EV metals (lithium, cobalt, graphite, nickel, and
NdPr) have all been slightly but not severely impacted by
COVID-19.

Demand

Demand has surprisingly remained solid helped by the strong
February global electric car sales. Demand temporarily shifted
in February towards Europe as China slowed. I expect this to
reverse somewhat in March and April. Despite generally overall
solid EV metals demand so far in 2020, many of the EV metals
are still working off oversupply from 2019, which has led to
lower prices for lithium, cobalt, and nickel in early 2020.
Nickel has also been more impacted by the global slowdown,
given its key demand is for stainless steel.

Supply

Whilst most mines have remained open there have been some
logistical supply issues as well as some government shutdowns.
For example Argentina temporarily closed its mining sector
which temporarily impacted several lithium miners operating in
Argentina. The ban has now been lifted for miners deemed as
“essential”. Chile and Australia have remained open. The DRC
has remained open, as has Namibia despite some cautions they
may close.

With regards to logistics and processing, China’s supply chain
has been only mildly impacted, as not all of China was
shutdown.

EV subsidies

We began 2020 with new German subsidies as well as tougher
emission targets in Europe and China. This has helped 2020 EV
sales. In March we had two significant new announcements:

     March 11, 2020 – The UK extended EV subsidies through to
     the 2022-23 financial year, with a grant of up to 35% of
     the vehicle’s value, capped at £3,500 ($4,500).
     March 31, 2020 – China decided to extend the validity
     period of the subsidies on new energy purchases and NEV
     purchase tax exemption for two years.

Note: The new Chinese 2 year subsidy extension news is still
not widely known, and it will be a very significant boost to
the Chinese EV sector.

Lithium-ion battery prices forecast by Bloomberg to fall to
USD 100/kWh by 2023 making electric cars purchase price
competitive to conventional cars by 2023

Source

Closing remarks

Despite the world currently being in or close to a recession,
the EV sector has been doing surprisingly well. At least as
far as EV sales and EV metals demand and supply. In terms of
pricing, the EV metals are lower and the EV metal miners have
also been heavily sold off.

Given that the share market has priced most EV metal miners
very low, the EV trend remains strong, and EV subsidies have
been extended or increased; I expect once the fear of
coronavirus passes the EV and EV metals sector will rebound
very strongly.

EV/Internal Combustion Engine (ICE) purchase price parity is
just around the corner (2022-23). This means it will soon be
the same price or cheaper to own an EV, with all the benefits

of much lower running and service costs. Investors would be
wise to take a second look at the sector before it booms again
soon.

The EV disruption continues
to roll on…

An update on the EV sector and a look at
the latest electric cars from the
Canadian International AutoShow in
Toronto
The electric vehicle (EV) roller coaster ride has continued
the past few months with near-record December 2019 sales
followed by a coronavirus led sales slump in January 2020.
Meanwhile, more governments have moved to ban the Internal
Combustion Engine (ICE) vehicles, and tougher emissions
standards have now come into force in Europe and China
motivating car manufacturers to sell more electric cars.

The latest EV news

     2019 global electric car sales were ~2.2m, up ~10% on
     2018. Tesla Model 3 was the electric car sales leader by
     far, selling almost 3x its nearest competitor.
     China announced that “China will not cut NEV subsidies
     in July 2020.”
     Indonesian President Jokowi announced: “Only green
     vehicles for Indonesia’s new capital.”
     The UK announced: “Britain will ban sales of new
     gasoline and diesel cars from 2035 — five years earlier

than planned.”
     Yesterday Reuters reported: “Singapore aims to phase out
     petrol and diesel vehicles by 2040.”
     Toyota (TM) makes a new A$571.18 million bet on electric
     flying taxis, and Hyundai Uber electric air taxi service
     is planned to launch by 2023.
     Tesla in talks to use CATL’s cobalt-free batteries in
     China-made cars – sources.

Hyundai Uber electric air taxi service is planned to launch by
2023

The latest electric cars from the 2020 Canadian International
AutoShow in Toronto

InvestorIntel has been busy at the show checking out all the
latest electric cars to show our readers.

InvestorIntel CEO Tracy Weslosky was there and had this to
say:

“The love affair with the car continues if crowds are any

indication. Genuinely impressed by the BMW i8 aesthetically, I
am told that it’s ‘barely’ electric so that places me back
standing at the Porsche. This said, while electric cars were
front and center stage and everyone is in the game, my Father
who accompanied me — wanted to look at the Buicks. I liked the
bike with sneakers.”

Some of the cars on show in Toronto this week

Lexus LF-30 electric concept car

The BMW Vision iNext incorporates Autonomous driving,
Connectivity, Electrification and Services (ACES)

BMW i8 hybrid with a small range – production may end soon

Audi Q5 hybrid

GM Bolt – 100% EV

Porsche e-mobility (Porsche Taycan 100% EV)

The sneakers bike that Tracy liked

Closing remarks

Nobody said a revolution was easy. The EV revolution (or
“evolution”) is certainly happening, but with plenty of
associated dramas. As usual, Tesla is at the center of
attention with its genius leader Elon Musk. In the past few
months, Tesla’s stock price has rocketed from below USD$ 200
to above USD$ 800 at present, “burning the shorts” as they
lost billions of dollars, with Elon left smiling and even
dancing in Shanghai.

The EV disruption continues to roll on despite short term
setbacks and is in for an amazing ride ahead with sales likely
to rise as much as 10 fold in the 2020’s decade.

Tesla hits new highs with Elon Musk proving the skeptics wrong

Source

Elon Musk dancing in Shanghai after Tesla stock quadrupled in
price the past 8 months

Source

EV sales rebound in China,
electric car makers rally on
the no significant subsidy
decrease in 2020
After a tough H2 2019 it now appears the EV slowdown is over.
The US-China trade war Phase 1 deal agreed to in mid December
2019 appears to have been the catalyst for electric vehicle
(EV) buyers to have confidence to buy EVs again.

China EV sales in December 2019 were about double November
2019

Chinese New Energy Vehicle (NEV) sales were recently reported
to be 163,000 in December 2019, which is sharply up from
November 2019 sales of 83,000. In fact, it is a 96% increase
month on month.

Given the trade war Phase 1 deal was announced on December 13,
2019, it appears that the renewed confidence has helped
December 2019 China NEV sales already.

China suggests no significant subsidy decreases in 2020

On January 11, 2020, Reuters reported: “China will not cut NEV
subsidies in July 2020 – Minister of Industry and Information
Technology Miao Wei said on Saturday.”

A later Bloomberg report confirmed the news stating:

“Electric car stocks jump as China signals lull in subsidy
cuts….. In order to stabilize market expectations, and ensure
the industry’s sustained development, subsidies on new-energy

vehicles will stay relatively stable this year, and they won’t
be scaled back significantly.”

Electric car makers rally on the no significant subsidy
decrease in 2020 news

As a result of these two great pieces of news last weekend, EV
related stocks have been rallying sharply. Chinese EV
manufacturers rose 10% (limit up) in China yesterday following
the news and are mostly rallying again today. BYD Co. (OTC:
BYDDY | OTC: BYDDF), China’s number 1 EV seller in 2019 and
global number 2, has rallied about 15% the past two trading
sessions. Last month BYD Co announced a Netherlands order for
259 pure-electric BYD buses. This was Europe’s largest ever
electric bus order. NIO Inc. (NIO) also rose 5.4% on the news.

BYD is leading the EV charge after a record e-bus sale in
December 2019

Tesla’s stock passes US$ 500 a share for the first time

Tesla’s (NASDAQ: TSLA) stock price jumped 9.77% yesterday on
the news with the stock hitting a new all time high of US$
524.86, breaking through the US$ 500 mark for the first time.
Tesla has just recently begun production and sales of Model 3
from its Shanghai factory. The hype has been so great that one
buyer proposed to his girlfriend by giving her a Tesla Model
3. Naturally, she said ‘yes’ to the proposal. I am not sure if
that was a yes to the Model 3 or to getting married?

A Tesla employee proposes during the delivery ceremony of
their Model 3

EV metal miners also rally on the news

The EV related miners (lithium, cobalt, graphite & nickel)
have also rallied strongly on the recent good news. Some such
as Galaxy Resources Limited (ASX: GXY) and Syrah Resources
Limited (ASX: SYR) are up over 50% in the past month after
suffering large falls in 2018 and 2019. Across the board, the
lithium miners surged this week on the China news. Lithium

leaders such as Albemarle rose 5.2% yesterday, while SQM rose
8.7%. Even nickel giant Norilsk Nickel (OTC: NILSY) rose 3.8%
on the news after already rising 94% in the past year helped
by the palladium boom.

Closing remarks

A combination of recent events such as the US-China Phase 1
trade war deal, the December 2019 China EV sales rebound, and
last weekend’s Chinese news that subsidies ‘will stay
relatively stable this year’ have all conspired to restore
confidence to the EV related market. This has led to a surge
in EV related stock prices. But don’t worry in most cases the
2018 and 2019 EV metals downturn has meant many EV metal
miners are still relatively cheap, especially given the EV
boom decade has just begun.

Nano One’s Dan Blondal on
making      longer-lasting,
longer-range        battery
materials    for   electric
vehicles
“Cathode manufacturing is about taking sources of lithium,
nickel, manganese, cobalt, iron, phosphorous and combining
them into a mixed metal oxide. Basically it is a ceramic
powder. Each of the little kernels of powder is a composite
crystal structured material that has layers lithium, nickel,
manganese, and cobalt that allows you to charge and discharge…
What we do differently at Nano One is we have developed a way

to make these materials. We have not changed the formulation
of the material but we have changed how we make the underlying
crystals. It is the formation of those crystals and the raw
materials that we choose to put in which help reduce the cost.
The number of steps we use is far less than the number of
steps the industry uses…We add everything together, coatings
included. We eliminate a bunch of steps as a manufacturing
advantage. The crystal structures that come out of our process
are highly purified crystal structures that are less
susceptible to cracking and degradation mechanism when you
assemble them into a battery and when you charge and discharge
the battery. We are shooting to improve the longevity
and durability of those materials. By doing that, we are
enabling electric vehicle manufacturers and battery producers
to make a longer-lasting and longer-range battery for electric
vehicles.” States Dan Blondal, CEO, Director and Founder
of Nano One Materials Corp. (TSXV: NNO), in an interview with
InvestorIntel’s Jack Lifton.

Dan went on to provide an update on Nano One’s joint
development work with Pulead Technology. He said that Nano One
and Pulead are working together to design a next-generation
manufacturing facility for the production of lithium iron
phosphate (LFP) cathode materials. Lithium iron phosphate
batteries have a very strong future because they are the
safest, longest-lasting and security of supply is high.

To access the complete interview, click here

Disclaimer: Nano One Materials Corp. is an advertorial member
of InvestorIntel Corp.

Taking Tesla head on.
Elon Musk must be hearing the sounds of horsepower of the big
boys in the automotive industry in his dreams or possible
nightmares. Ford has announced the Mustang MACH-E. Porsche has
announced its entry level Taycan 4S and VW, among other German
producers are actively moving into the EV space. VW has
indicated it plans to sell 3 million units a year. This
compares to Tesla’s total sales of 816,155 since its start of
production in early 2013 until the end of Q3, 2019. Recent
sales are close to 100,000 units per quarter. (1). In
addition, the Japanese and other North American producers are
actively entering the EV market.

Now granted Porsche is just entering the EV space and at a
much higher price than the Tesla S, but then again Porsche has
not tried to sell to everyone. The Tesla S has a better range
but at the end of the day when one is putting out 6 figures
for a car, a Porsche is still a Porsche and a history of
producing cars that people dream about.

On the other end of the scale is the Tesla Y, to be released
next year based on the Tesla 3 platform, and Ford’s new entry,
the Mustang MACH-E. Projected horsepower is 332 for the Ford
and just over 400 for the Tesla Y. The Ford is expected to be
just under $44,000 compared to an expected price of $48,000
for the Tesla Y base model. However, the Mustang will have a
tax credit of $7,500 for the first 200,000 units. We will have
to see if the Mustang brand will carry weight going forward
since the vehicle does not carry any of Mustang history or
cache, other than the name.

It will be interesting to see how the EV market evolves as
more and more options enter the game. The difference is That
Tesla is a ground-breaking, visionary startup but some of the
fit and finish issues as shown on YouTube may be an Achilles
heel. The new entrants have a long history in automotive

manufacturing and name recognition.

But wait. Elon Musk has just made a foray into the heart of
American vehicles. The pickup. Just revealed is an eye-
popping, radical design that looks like a pyramid on wheels. A
stainless-steel body that claims to stop some small arms fire
and unbreakable glass that cracked during the reveal. Ooops.
But then Apple had some glitches on a launch. The pricing is
competitive to a Ford-150. It is a question if the radical
design will be accepted in the market. Elon has said that a
more traditional design may be possible but remember when a
Hummer was seen as a status symbol. Time will tell if this
leap into the future (aka “the DeLorean”) is a flash in the
pan or a visionary move.

Tesla has announced gigafactories in Berlin and Shanghai so
getting into the backyard of two significant markets and home
of major competitors like BYD, Porsche, BMW among others. So,
what is the future of Tesla? To build the new factories will
take a lot of capital. That will mean raising long term debt
which will reduce the earnings per share of the company.
Obviously, Elon has a lot of balls in the air, including his
space ventures. One option would be to leave the making of
vehicle platforms to those who have been doing it for decades
and focus on what they do well. Batteries and drivetrains.
Then again this does not take into effect the Trump-factor,
but we will see what the future holds.

Electric pickup trucks are
coming soon – The Tesla

pickup reveal is on November
21
Electric bikes, sedans and SUVs are all now regularly seen on
our roads, but soon we will start to see electric trucks of
all types and sizes.

The Tesla electric pickup truck

This coming November 21 is the Tesla (NASDAQ: TSLA) all-
electric pickup truck reveal. The Tesla pickup, also nicknamed
the “Cybertruck”, is said to look like something from the
movie Blade Runner. In October Elon Musk tweeted: “Cybertruck
doesn’t look like anything I’ve seen bouncing around the
Internet. It’s closer to an armored personnel carrier from the
future.”

The base model price is said to be under US$50,000. Range is
expected to be between 400 and 500 miles depending on the
version. Production dates are yet to be released.

Elon has said the e-pickup truck will be “a better truck than
an F-150 in terms of truck-like functionality, and be a better
sports car than a standard (Porsche) 911.”

Other Tesla products expected soon are the Tesla Roadster 2
and Tesla Semi (said to be entering production in 2020), as
well as Tesla Model Y (deliveries starting possibly in late
2020).

The Tesla electric pick up truck mystery – What will it look
like?

The Rivian electric pickup truck

Another electric truck coming soon that has already had a
great response from the public is the Rivian electric pickup
truck, known as the ‘Rivian R1T pickup’. It will have a range
of ~400 miles, 4 electric motors which will accelerate from
0-60mph in just 3 seconds, and a starting price of US$69,000.
It is currently in the testing stage and first deliveries are
set to begin in late 2020. Both Amazon and Ford are backers of
the company which is still not yet listed.

The Rivian R1T pickup will be perfect for taking on a road
trip

The all-electric Ford F-150

Even the current US pickup truck leader Ford is racing to have
an electric pickup as soon as possible. Ford is the undisputed
leader in US conventional pickup truck sales.

The key takeaway for investors is that the electrification of
the entire transport fleet is coming, noting long range planes
will be conventional or hybrid. Electric pickup trucks are
just around the corner.

Based on past performance Tesla is the one to beat, given they
dominate the US electric car market sales with 57% market
share, and are the global number 1 electric car seller with
16% global market share. Tesla previously disrupted the luxury
large sedan market with Model S, and is now disrupting the
small and mid-size luxury sedan market with Model 3. Rivian
(private) look to have a great niche product for those on a
high budget, and Ford should benefit from their loyal pickup
customer base, but certainly look likely to lose market share.

For now my money is on Tesla. Tesla Model 3 sales is
dominating the luxury car market of conventional cars in the
US and its production in China is about to begin. They have a
great pipeline of new EV products ahead (Semi, Roadster 2,
Pickup, and Model Y), their energy storage products
(Powerwall, Powerpack, and now Megapack), as well as their

solar roof. Tesla was profitable last quarter but still has a
lofty forecast 2021 PE of 49, and an analyst’s consensus
“hold” and price target of US$285. I think this price target
will be upgraded if China Model 3 sales go well, and Tesla’s
profits start to increase each quarter.