April 27th, 2021 | 12:00 CEST
BYD, NIO, Nikola, Nevada Copper - The Tesla hunters step on the gas!
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BYD and NIO - Hot on Tesla's heels
Can BYD and NIO get past their competitor Tesla? The decisive question will be battery technology because it is one of the core elements of electromobility. Only in recent months has the public become increasingly aware that the Chinese car manufacturer BYD also has a lot to offer in this area. Soon, the division could be listed separately on the stock exchange. If not now, when?
BYD is currently restructuring its battery business because it wants to sell its power units to other car manufacturers in the future. As announced at the Shanghai Auto Show, the medium-term goal is to manage an IPO in the next 2 years. The market should be greedily waiting for such Tesla competitors. Specifically, the offshoot Shenzhen Pingshan Fudi Battery, also known as FinDreams, has taken complete control of BYD's battery business. Just a week ago, FinDreams announced plans to massively expand its production capacity. FinDreams is a technological spin-off of BYD from 2019.
NIO Ltd. is also several steps ahead. The Chinese electric vehicle startup had unveiled the new ET7 model, as the first NIO electric sedan, in early 2021. On April 1, 2021, the first body then rolled off the production line at the plant in the technology metropolis of Shanghai. Well-known and very financially strong investors back the Chinese electric vehicle producer NIO, and the Company is also a pioneer in battery swap systems.
The strong sales growth for BYD and NIO in China is likely to continue in the coming years, as the demand for vehicles with alternative drive systems remains enormously high. In the first quarter of 2021 alone, around ten million registrations of such vehicles were reported by China's Ministry of Public Security - a new record. The share of cars with purely electric drives was just over 80%. Good for BYD and NIO - both shares are currently coming out of the woodwork again after a sharp price correction.
Nikola - 90% crash - what is next here?
Nikola Motor Company is taking a different green approach. It calls itself the first truck manufacturer to use a hydrogen drive. The name, by the way, was chosen specifically to tie in with Tesla's success story. After last year's scandal with manipulated marketing videos, however, the stock took considerable damage, and the founder and CEO resigned as a result.
But Nikola also wants to get its hands on the Biden billions. Biden recently unveiled the second of three stimulus programs, an infrastructure package for bridges and airports. It provides for investments of USD 2.25 trillion over eight years. In addition, there are tax breaks of USD 400 billion for renewable energies. In total, it is estimated that about another USD 1,000 billion could go toward climate action. A cake that will be divided among many suppliers.
Nikola stock had hit the ground running at over USD 90 and a capitalization of nearly USD 40 billion in 2020, until its value plummeted by 90% due to subsequent scandals. Currently, the stock is trying to stabilize at around USD 11, with a low of USD 9.37 in early April 2021. Let's see how things go here. Trust is good - but a precise selection of investments is probably the better advisor.
Nevada Copper - Steady progress in mine expansion
Nevada Copper is a beneficiary of the global electrification wave. Already 70% of the world's copper production is used in electrical products, and according to the latest studies by economic institutes, this share could become even larger. The reason is that copper recycling can no longer make up for the deficits on the supply side. The real reason for this misery goes back to the extensive mine closures between 2010-2015 when the copper price abruptly crashed from USD 10,000 to below USD 5,000. That is precisely where it was again in March 2020, when everyone believed in the pandemic-related end of the world.
Far from it, because increasing digitalization and the trend towards environmentally friendly transportation drive the price of copper more and more. In 2021, the USD 9,500 mark has already been approached twice, and the next time the breakthrough to the top could follow.
Nevada Copper is sitting on an extensive resource with underground and Open Pit potential in the immediate vicinity. There has been no new production facility in North America in the last 10 years, so international attention to Nevada Copper's Pumpkin-Hollow project is high. Currently, the underground mine's equipment features are being upgraded weekly. These include improving ventilation, increasing safety measures, and ultimately increasing the production rate, which has now reached about 4,700 tons of rock per day. The average copper concentrate content has also been increased from 24 to 26%. Stable production of 5,000 tons per day is expected to be achieved in the third quarter.
NCU shares are currently trading very high on the stock market, with huge interest from the investment community. The price fluctuates between CAD 0.18 and CAD 0.21, which certifies Nevada Copper a capitalization of CAD 380 million. The project is progressing. One should not wait too long with an entry.
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