Altech Advanced Materials, Mercedes-Benz Group, NIO - Electric mobility on the verge of a revolution

Altech Advanced Materials - CERENERGY project moves forward

Altech Advanced Materials (AAM) is starting to shake up the battery world. It is pursuing three projects in this area at once. First is its high-purity alumina business in Malaysia. There, the Company has the option to acquire 49% of the project from Altech Chemicals Australia. The alumina will be used in the battery material coating project. AAM has the technology to coat anode material, such as graphite or silicon, with a ceramic nano-coating. The advantage is that lithium particles can no longer be deposited on the battery's electrode. This makes the battery 15% more powerful, increases its service life by 30%, and improves safety.

The third business area that could displace lithium-ion batteries long-term is the environmentally friendly CERENERGY batteries, which are being developed jointly with the renowned Fraunhofer Institute. The joint venture plans to produce CERENERGY SAS 60KWh battery packs at AAM's Schwarze Pumpe manufacturing facility. The batteries are non-flammable, work in all climates and can be produced around 40% cheaper than lithium-ion batteries, as no lithium, cobalt, graphite or copper are needed. Leadec, the lead engineering firm, has already completed the design basis for the 100MWh production facility. The plant will initially be capable of producing 1,500 units of CERENERGY SAS 60KWh battery packs.

Initial discussions with interested customers have already taken place. AAM says it is trying to land offtake agreements ahead of the feasibility study. Those who want to learn more about the Company should look at the study on researchanalyst.com. Alternatively, one can watch the live Company presentation at the 6th International Investment Forum on February 15 at 5:30 PM and ask the CEO questions directly. With this outlook, it is not surprising that the stock has gained over 70% at its peak since the beginning of the year. The share is currently trading at EUR 5.40, giving it a market capitalization of around EUR 38 million.

Mercedes-Benz - Decent sales figures in a challenging environment

The Mercedes-Benz Group is now also relying on silicon as an anode material. The Mercedes EQXX is a new electric vehicle equipped with innovative technologies. It uses advanced silicon technology to optimize its performance, which explains why the EQXX could travel over 1,000 km on one charge. In the process, the concept car required just 8.3 kWh per 100 km. It also has a solar roof that provides an additional range of up to 25 km over long distances. The battery is lighter and can even fit in a small car.

The concept car will probably not go into series production, but parts of the technologies installed could find their place in well-known vehicles. Autonomous driving, for example, is also apparently within reach. Mercedes-Benz was the first manufacturer worldwide to receive SAE Level 3 certification for highly automated driving in the US state of Nevada. From 2024, the so-called Drive Pilot will be available as an optional extra for the S-Class and the EQS. Sales figures in the e-mobility segment are rising, as seen from the 2022 delivery figures. While 1% fewer vehicles were sold overall, electric vehicles increased by 19%. There were also 14% increases in the premium segment.

These figures also explain the 6 buy recommendations that came out in January. The price targets were between EUR 79 and EUR 90. According to a Berenberg study, the automotive industry expects demand to weaken this year. In the premium segment, a decline in demand is rather unlikely. Against this background, Mercedes-Benz has good cards with its S-Class and EQS. At the beginning of the year, the share started at around EUR 62 and shot up to EUR 69. Currently, one share costs EUR 67.75.

NIO - Records in November and December

While sales figures for Mercedes-Benz fell slightly, NIO gained 34%. The Company is a Chinese electric vehicle (EV) manufacturer and had a strong year in fiscal 2022 with 122,486 deliveries. Deliveries in November and December set a new record, reaching nearly 30,000 units. The China Passenger Car Association expects sales to grow by about 2 million vehicles to 8.5 million this year, which is a 31% increase.

A battle for market share has broken out in China. If NIO celebrated new records in December, Tesla's sales would have plummeted. This could be related to NIO's Model ET5, which directly attacks the Tesla Model 3. NIO is also trying to optimize its batteries and signed a strategic partnership agreement with battery giant CATL on January 17. The goal is to build a battery delivery system. In the end, both parties want to benefit from this and increase the competitiveness of the Chinese e-mobility industry.

The stock has yet to recover much since Covid eased its measures. This may also have to do with a price cut by Tesla in China. On January 24, the stock was looking to continue its upward trend but failed to reach the previous high and thus has been running sideways between USD 9.50 and USD 14.36. Currently, the stock stands at USD 12.02. Production is now at 15,000 vehicles per month. Thus, sales can continue to grow in the coming year.

Research in the field of rechargeable batteries is running at full speed. Whoever establishes a product as a standard will earn a golden nose. Altech Advanced Materials has several hot irons in the fire. If the breakthrough succeeds, the stock will have to be revalued. Mercedes-Benz is well positioned in the premium segment and is also catching up in the electric vehicle sector. As soon as the supply chain problems are resolved, there is upside potential. NIO had no supply problems last year, and 34% more vehicles were sold. We should keep an eye on the sales figures for the ET5 model.