BYD, Altech Advanced Materials, Mercedes-Benz - Electromobility is being driven forward despite all the prophecies of doom

BYD - Positive quarterly results

BYD has now secured market leadership in the Chinese market and is striving to internationalize. The EU Commission has imposed new tariffs on Chinese electric vehicles. This measure is intended to alleviate competitive pressure on European manufacturers. A special tariff rate of 17.4% on BYD vehicles is expected, yet the Chinese automaker still sees itself as well-positioned. At the same time, BYD is planning production facilities in Europe to minimize the impact of future tariffs. A plant is already being built in Hungary, aiming to keep the manufacturer competitive even if higher tariffs are imposed.

BYD reported record delivery figures of 1.61 million units for the first half of the year, an increase of around 28.5% compared to the previous year. The Company almost reached the 1 million mark in quarterly deliveries, representing a solid foundation for the targeted 3.6 million deliveries in 2024. In June alone, 341,658 electric vehicles were sold. These impressive figures confirm BYD's strong market position and the effectiveness of its pricing and product strategies. Analysts are confident that BYD could surpass Tesla in BEV sales figures for 2024.

Warren Buffett's Berkshire Hathaway again reduced its stake in BYD and continued to sell shares in June. This brought Berkshire's stake down to 5.99% of the issued H-shares. Despite these sales, the analyst community remains optimistic: Nomura raised its price target for BYD to HKD 305 and continues to forecast strong growth in deliveries and margins. A total of 39 of the 41 analysts listed on Bloomberg recommend buying BYD shares, underlining the positive sentiment in the market. The share is currently trading at EUR 27.53.

Altech Advanced Materials - Financing as a catalyst

Altech Advanced Materials has presented a promising innovation with Silumina Anodes™. This innovative technology increases battery performance through a unique silicon coating. It increases energy density by at least 30% compared to conventional anodes, resulting in longer-lasting and more efficient batteries. A recently completed feasibility study confirmed the viability and benefits of this technology. Altech now plans to industrialize it and supply the coated anode material to leading automotive and battery manufacturers.

Altech Advanced Materials has reached another milestone with the development of the CERENERGY® battery based on sodium chloride. This solid-state battery offers numerous advantages over lithium-ion batteries, such as increased safety through non-flammability and a service life of more than ten years. They also do not require critical raw materials such as cobalt, which makes their supply chain more resistant to geopolitical risks. The production of these energy storage units will take place in Saxony. The cost of building the plant is estimated at around EUR 180 million and is to be financed by a combination of government grants, debt, and a green bond.

The Company is pursuing ambitious plans to realize the production of Silumina Anodes™ and CERENERGY® batteries on an industrial scale. The Management Board aims to secure financing by Q1 2025. The business plan envisages that the first battery production will start around 24 months after the financing has been completed. Analysts see great potential for the Company, particularly in the fast-growing market for energy storage solutions, which is expected to experience above-average growth in the coming years. The share has come under pressure due to the latest capital measure and is currently trading at EUR 3.98.

Mercedes-Benz - Investing in combustion engines and electromobility

In a surprising move, Mercedes-Benz has announced that it will re-invest in the development of combustion engines. This decision follows Volkswagen's lead despite the global trend towards electrification of the automotive market. According to Group CEO Ola Källenius, the Company will invest EUR 14 billion in 2024 solely in the passenger car division, focusing on research and development, manufacturing facilities, and various propulsion technologies. A large proportion of these investments will be made in Baden-Württemberg. Källenius firmly dismissed rumors that Mercedes is turning away from electric models and emphasized that the project for a new electric S-Class is still running at full speed.

This is also demonstrated by the investments in the field of battery technology with the recent opening of the eCampus in Stuttgart-Untertürkheim. The eCampus will serve as a competence centre for the development of new cell chemistries and optimized production processes. The aim is to reduce battery costs by more than 30% in the coming years. The "Industrial Cell Lab" will cover the entire product and process chain of cell development and production. The efforts are part of Mercedes-Benz's sustainable business strategy, which aims to achieve a CO2-neutral vehicle fleet in the long term.

Analysts remain optimistic about Mercedes-Benz shares, although the focus is sometimes weighted differently. Philippe Houchois from Jefferies confirms the "Buy" rating with a price target of EUR 100 and points to positive margin targets. Jose Asumendi from JPMorgan expects an operating result of EUR 4.1 billion and a stable margin for the second quarter. Tim Rokossa from Deutsche Bank Research is even more optimistic, with a price target of EUR 125. At the same time, Bank of America downgraded the share and lowered the target price to EUR 60. The share took the downgrade badly and fell to EUR 63.15.

Electromobility is being strongly promoted by BYD, Altech Advanced Materials, and Mercedes-Benz. BYD, market leader in China, is expanding into Europe with production facilities to cut tariffs and record deliveries of 1.61 million units in H1. Altech Advanced Materials is developing innovative battery technologies and aims to finance the production facility by Q1 2025. Mercedes-Benz is investing in both combustion engines and electromobility, with a new eCampus in Stuttgart for battery cell development.