First Phosphate, Volkswagen, JinkoSolar - Hot commodity rally with 40% growth opportunity

First Phosphate launches pilot plant to produce phosphate concentrate for the LFP battery industry in North America

The race for CO2-neutral propulsion systems is in full swing. Whether in logistics or on highways in passenger cars, electromobility is the future. Lithium iron phosphate (LFP) batteries, in particular, are particularly environmentally friendly, unlike their nickel competitors.LFP batteries are used in electric vehicles (EVs) and for energy storage.

The focus here is on the Canadian company First Phosphate. The mining company focuses exclusively on the extraction and purification of phosphate for the production of cathode-active material for the LFP battery industry. First Phosphate operates in an ESG-compliant manner, ensuring a high degree of purity of the raw material and expanding production with a low CO2 footprint.

First Phosphate has successfully started its pilot plant to produce phosphate concentrate. This concentrate is used to produce high-quality purified phosphoric acid, which is used in North America to formulate active cathode material from lithium iron phosphate (LFP) for the eponymous battery industry.

The Company owns over 1,500 sq km of royalty-free land mining rights in the Saguenay-Lac-St-Jean region of the Canadian province of Quebec. These are being actively developed. The permit areas consist of rare anorthosite phosphate igneous rocks that yield high-purity phosphate material without high concentrations of harmful elements.

Research and consulting group Wood Mackenzie expects LFP cathodes to take the largest share of the global market from 2026. According to their analyses, global production of LFP cathodes will increase by 42% year-on-year to 685 kt in 2023 and grow steadily at a compound annual growth rate (CAGR) of about 13.8% per year over the next 10 years.

Volkswagen secures lithium battery raw materials from Brazilian mines and runs on sugar cane fuel

Raw materials are crucial for the economic expansion of the next generations of automotive batteries. So Volkswagen, together with Stellantis and Glencore, is supporting the purchase of Brazilian mines for battery raw materials. Volkswagen is planning a massive expansion in Brazil with electric and hybrid vehicles. The automaker aims to grow by 40% by 2027 and plans to introduce 15 new models by 2025, with the first all-electric models, such as the Volkswagen ID.4 and ID. Buzz will be launched on the Brazilian market this year. Volkswagen is thus consistently focusing on expanding its business in growth markets and strengthening its commitment to sustainable mobility.

The South American automotive market is expected to grow by 11% annually until 2030, making it one of the fastest-growing markets worldwide. Although the shift to pure electric vehicles is expected to be slower in Brazil than in Europe, Volkswagen is targeting faster growth in battery electric vehicles (BEVs) than the market. The total market share of BEV-only vehicles is estimated to be around 4% in 2033.

Volkswagen is committed to alternative powertrains and technology openness until full market electrification is achieved. All new models produced in the region can continue to run on 100% biofuel. In this respect, the Wolfsburg carmakers are showing themselves to be quite creative. For propulsion, it is now to be sugar cane.

Ethanol, derived from sugarcane, is a fuel produced through the fermentation of sugar with yeast. Compared to conventional gasoline, it reduces greenhouse gas emissions by up to 80%. The sugarcane fields used for ethanol production account for less than 0.8% of Brazil's territory. Brazilians can rejoice: on the one hand, they get CO2-reduced Volkswagen models, and on the other, the relevant raw materials are extracted from the country's own mines - while bridging the gap with the sugarcane-based fuel.

JinkoSolar launches G2 battery on the European market

Chinese company JinkoSolar is launching its second-generation, high-voltage energy storage battery on the European market. "We are once again setting the standard, this time not only in the photovoltaic sector but also in the energy storage segment, by offering a wide range of smart new energy solutions that meet the growing demands of the market," explains Frank Niendorf, General Manager Europe at JinkoSolar.

JinkoSolar is pursuing a strategy for storage and PV solutions in the EU based on high-quality and reliable products that meet the specific needs of customers in the region. The novel JKR-B1250~2750-A (G2) is a high-performance energy storage system with a capacity of 3.84 kWh per single pack. The use is intended for residential and commercial applications. The storage system provides a long life of 6000 cycles at an average room temperature of 25°C.

The battery allows wireless connection between packs, with a 45 A charge and discharge current, support for 3-7 packs per rack and direct parallel connection between racks. With IP65 protection and a cell safety feature, it ensures maximum system security. The product also features a unique heating system for an extended operating temperature range and protection logic for added safety.

According to a report from Seeking Alpha, the announcement of JinkoSolar's new battery for sale in Europe led to a rise in the Company's stock price. This may indicate a relaxation of concerns regarding the Company's geopolitical issues. Investors had temporarily sold their shares in the solar module manufacturer after office raids in Florida and California last month but returned shortly after.

LFP batteries handle heat very well. Unlike batteries with other oxide compounds, LFP batteries exhibit no thermal effects at temperatures up to 300°C. LFP is therefore considered unbeatable in terms of safety aspects, and the growth forecasts speak for themselves. With First Phosphate, investors have an LFP supplier in their portfolio in a democratic country and in an industry that is booming massively. Volkswagen is investing in battery raw materials expansion and plans to buy Brazilian mines. The automaker is aiming for a massive expansion in Brazil, with a goal of 40% growth by 2027. In doing so, Volkswagen is relying on sugar cane as an alternative power source to offer CO2-reduced models for the Brazilian market. JinkoSolar is riding in on the commodity rally, bringing its G2 battery to the European market. JinkoSolar's share price rise following the announcement of a new battery indicates an easing of geopolitical concerns.