E-mobility and hydrogen: BYD, Almonty Industries, Thyssen, Nel ASA - Things are really starting to happen now!

BYD - A huge deal with Sixt gives wings

Just in time for the Paris Motor Show in October, BYD is ready with four models in Germany. The first sales partnerships have been concluded, and now there is a blockbuster deal right at the start. One of the largest German car rental companies, Sixt from Pullach, is ordering 100,000 fully electric vehicles from the Chinese manufacturer. They will be phased into service by 2028. Still, the Munich-based Company plans to take delivery of several thousand vehicles this year and offer them to its rental and leasing customers in Germany, France and the UK.

This order is an accolade for BYD because it already has an anchor order over its competitors for its entry into Europe. "Our goal is to delight Sixt customers with our latest products and innovations in electric vehicles," said BYD manager Michael Shu. At the same time, it was announced that BYD has become the world's second-largest battery manufacturer after CATL.

The vertical integration is a boon for Build Your Dreams, as the group surpassed the 100,000 e-vehicle sales mark for the first time in March 2022, and the Company aims to have sold 1.5 to 2 million e-cars by the end of 2022. That would be a fourfold increase in production compared with the previous year. Rival Tesla was already outpaced mid-year. BYD's stock has not been able to escape the weak market as a whole, losing around 40% since its all-time high in July at EUR 41.80 until now. However, a strong rebound in the share price to just under EUR 28 is now evident, with the current market value of just under EUR 80 billion delivering a neck-and-neck race with Germany's Volkswagen AG. BYD remains a good long-term investment.

Almonty Industries - Global demand creates project security

Tungsten is needed for high-tech production and the hardening of steel. The world has problems with China as the leading supplier because with all the smouldering geopolitical conflicts, there is also the threat of rationing from the Middle Kingdom. The Canadian Almonty Industries (AII), with its 3 locations in Spain, Portugal and South Korea, has fully concentrated on this narrow tungsten market. The uniqueness of the metal lies in its heat resistance and hardness properties for surfaces. Therefore, the technical field of application ranges from construction to high-tech, medicine, armor and aircraft technology. While it usually requires smaller quantities, availability remains important. In e-mobility, each vehicle already requires about 1.4 kilograms of tungsten, which could expand to as much as 2.5 kilograms with the introduction of tungsten-based cathode coatings in Li-ion batteries.

With the development of the Company's Sangdong mine in South Korea, world supply could shift by about 5% to a friendlier jurisdiction. Because of its strategic importance, Germany's KfW is also involved in financing the project. Of the USD 75 million pledged, 22.5% has already been paid out. Specifically, the project consists of the construction of a vertically integrated nano tungsten oxide processing plant to supply the South Korean industry in the battery market. Almonty is currently negotiating with Austrian plant engineering specialist Frauental to design the facility at South Korea's Seok Moon industrial complex. Local producers Samsung or TSMC will welcome Almonty happily.

In the fourth quarter, members of the board and staff will visit the planned mine site together with KfW IPEX-Bank and external consultants. After that, things should move quickly, as the tungsten market is more receptive than ever. The AII share has not been able to escape the current downward spiral for explorers, although the timeline to production should now be manageable. The current share price in Canada is a low CAD 0.60, valuing the total project, including debt, at a low EUR 200 million. Feel free to put Almonty Industries back on the investment shortlist.

ThyssenKrupp and Nel ASA - Hydrogen could become a blockbuster topic in 2023

In the slipstream of e-mobility, hydrogen technology is also developing. Significant public funding is still lacking, even though announcements have been made in several government packages. But the industrial appeal is clear because currently, the heavy dependence on fossil fuels is taking its revenge, as is the highly dynamic nature of electricity prices. Hydrogen could, in widespread production, remedy the disadvantages of fossil or electric mobility, but currently, the production costs are not yet competitive.

Nel ASA is one of the key European players. However, quarterly sales are still very low at around EUR 25 million. So it is already a big order when the US Department of Defense orders fast and advanced PEM electrolyzers in the amount of USD 5.6 million. Nel is cooperating with the ERDC-CERL, a highly established US military-related facility. Thyssen is also making progress with its hydrogen division in the US. That is because its subsidiary Nucera is supplying its engineering services for the alkaline production of hydrogen to various Air Products sites for the mobility market in California. Because of the poor state of the market, Thyssen recently postponed Nucera's IPO indefinitely.

Both shares are still technically under pressure. ThyssenKrupp recently even trended towards an all-time low of EUR 4.30, while the Nel share again reached its frequently tested lower limit since 2020 at EUR 1.10. Initial recovery movements of around 10% were recently achieved, thus moving the sell-off zone out of sight for the time being. In a better environment, the popular technology stocks have considerable potential.

In addition to e-mobility, the energy transition is the key driver for innovations in the GreenTech sector. BYD is a Chinese standard stock with high growth momentum. ThyssenKrupp and Nel ASA can currently only dream of this. Almonty Industries is now making rapid progress in South Korea.