May 18th, 2023 | 09:50 CEST
BYD, Plug Power, Altech Advanced Materials: Winners of the energy transition with news
Table of contents:
"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
Altech: "Germany is throwing away billions of euros' worth of electricity."
CEO Uwe Ahrens expressed his conviction at an investor conference in Frankfurt earlier this week that the market potential for Altech Advanced Materials is huge: "The energy transition cannot take place without batteries. In 2021 alone, Germany threw away EUR 2.3 billion worth of electricity because the grids were full. For grid operation, there can be no better battery than ours." The Company is currently developing the CERENERGY® Sodium Chloride Solid State (SCSS) as an alternative to lithium-ion batteries for use as stationary grid storage. The advantages are numerous: the battery technology uses common salt and is free of lithium, cobalt, graphite and copper. All raw materials can be sourced from Europe. Corresponding agreements have already been concluded. The battery has a lifespan of more than 15 years, is fire- and explosion-proof and does not degrade in performance at high or low temperatures.
Recently, the production of two prototypes of the CERENERGY® 60 kWh (ABS60) battery pack intended for market launch was initiated. The innovative sodium-aluminium oxide solid-state battery prototypes are manufactured at the joint venture partner Fraunhofer IKTS in Hermsdorf. The high-performance battery packs are intended for industrial operation. They are to be used primarily in the areas of energy storage of renewable energies from wind and solar power plants as well as grid storage. In other words, to avoid "throwing away" electricity in Germany. Uwe Ahrens: "All the major utilities are planning battery parks in the gigawatt range." The potential for stationary grid storage is huge: the global market for battery energy storage systems is expected to explode from USD 4.4 billion in 2022 to USD 15.1 billion in 2027 - and the trend is still rising.
Preparations for mass production in Saxony are underway: The first production line is to have a production capacity of 100 MWh. The feasibility study is to be completed before the end of the current year. The share price has tripled in recent months. After a healthy correction with a drop from EUR 12 to EUR 10, the price seems to be bouncing back. In any case, the presentation at the investor conference was very well attended.
Plug Power: Over 300% price potential?
The Plug Power share could soon recover from its lows. At least, this is the opinion of the analysts at Evercore. They believe that the Plug Power share could rise to USD 37. The share is currently trading at around USD 7.60. According to BMO Capital Markets, this level is appropriate. The analysts' target price is USD 7.50.
The potential of hydrogen is undisputed, and Plug Power is considered a leading pure-play, yet it seems sensible to wait before buying. For one thing, the Company - unlike the other hydrogen specialist, Nel from Norway - needs help to get a grip on its costs. In the first quarter of 2023, the US company significantly increased its turnover from USD 141 million to USD 210 million, but also its losses from USD 156.5 million to USD 206.6 million. This, again, scared off investors and analysts. And Plug Power's sales forecast for the full year 2023 of USD 1.2 billion to USD 1.4 billion was also significantly below expectations. And this brings us to the second good reason to wait and see: the need for capital due to the high losses. Although the Company still has funds of over USD 1 billion at its disposal, the review of financing options was announced with the quarterly figures. Although an equity increase and, thus, a dilution of existing shareholders is to be avoided, debt capital is also unlikely to be cheap in the current environment.
BYD: Launch in Portugal
BYD does not seem to have any financing problems at the moment. The Chinese are investing at an astonishing speed. The construction of a new battery or car factory is announced almost weekly. Most recently, the purchase of an industrial site in Shenzhen with a size of more than 522,000 sqm was reported. The purchase price is said to be around USD 5.4 million. Among other things, production facilities for the manufacture of e-cars and energy storage systems are to be built on the site.
Sales of the vehicles are to increasingly take place outside the home market of China. In the current year, the Chinese company is attacking Europe. In an interview with WirtschaftsWoche, BYD manager Lars Pauly also expressed the goal of becoming the market leader in Germany. The self-confidence is not unfounded. In China, BYD already sells fifteen times more electric cars than Volkswagen.
BYD is also stepping on the gas in other European countries. In Portugal, the Chinese will in future work together with the largest car dealer on the Iberian peninsula. The Salvador Caetano Group is to set up nationwide sales and customer service for BYD. The all-electric SUV Atto 3 will be sold in Portugal as early as the second quarter of the current year.
BYD and Altech are on a roll. The correction in the Altech share seems to have already ended, and operationally things are moving forward in leaps and bounds. With BYD, it will be exciting to see how the expansion in Europe works out in the current year. Hopefully, Volkswagen, BMW & Co. will have suitable answers to the self-confident challenger. Plug Power is not lacking in self-confidence, either. In any case, investments will continue unrestrictedly. However, investors currently prefer to watch this from the sidelines.
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