In the China-commodities chess game: Power Metallic Mines as a beneficiary, BYD facing tariffs, Volkswagen on the defensive

Power Metallic Mines – On its way to becoming a polymetallic heavyweight

Investors seeking an exploration company with substance should keep an eye on Power Metallic Mines. The Company is vigorously advancing its flagship NISK project in Québec. The latest drilling results not only deliver impressive figures but also underpin a clear strategy. The Company is developing a significant polymetallic deposit. With strong backers such as Robert Friedland, Rob McEwen, and Gina Rinehart, and a project that combines copper, nickel, cobalt, and precious metals, the Company is skilfully positioning itself in a highly strained commodities environment.

The results of the summer drill program are impressive. Drill hole PML-25-020 intersected 4.57% copper equivalent over 22 m. Other holes returned similarly high values, indicating exceptionally rich ore bodies. The peak copper equivalent value was 15.45%. In addition, the Company has made a clever move. Power Metallic Mines has massively expanded its land package through a transaction with LiFT Power. The seller's confidence in the area's potential is evident in the fact that he insisted on payment in Power Metallic shares. This is also a vote of confidence in Terry Lynch's management team and the future of the Company. In addition, previously restricted, promising areas near the Lion Zone have been made accessible.

An important next step was initiated on October 16. The first metallurgical tests on the Lion deposit have begun at SGS Canada. This is an essential step in quantifying the potential metal yields. At the same time, Power Metallic is playing a greater geopolitical role. China's recent tightening of export controls on critical minerals is increasing pressure on the West to diversify supply chains. A copper- and precious metal-rich project in a stable region such as Québec is becoming significantly more strategic in this environment. For investors betting on long-term commodity demand, the story thus offers several interesting points of entry. The stock is currently trading at CAD 1.27.

BYD – Why the electric vehicle giant is staying on course even in turbulent times

BYD is defying fierce competition with impressive financial clout. Its balance sheet is healthy. The Company has more cash than debt, a sign of high liquidity. Its working capital management is particularly clever. BYD collects payments from its customers before it has to settle its own invoices with suppliers. This financial buffer gives the Company enormous leeway. To counter criticism of long payment terms, BYD cleverly uses its own bills of exchange, which can be traded on an in-house platform. This allows the money to remain in the Company longer without violating formal payment terms. This solid foundation finances massive global expansion without burdening the balance sheet.

While many competitors are coming under pressure in the relentless price war in China, BYD's margins are holding up remarkably well. The key to this is its unique vertical integration. BYD manufactures its own batteries and semiconductors and is therefore not dependent on suppliers. This control over the value chain enables it to optimize costs consistently. The result is an impressive gross margin of over 19%. Since BYD already offers its vehicles at very competitive prices, the margin is its decisive buffer. Should price pressure continue to increase, the Company has enough leeway to go even lower if necessary without incurring losses.

BYD is continuing its expansion course unabated, demonstrating a keen sense of local conditions. The latest reports from October underscore this. In Europe, BYD has almost quadrupled its registrations and is now playing in the league of established players. At the same time, the Company is tapping into the difficult Japanese market through an innovative partnership with retail giant Aeon. Electric vehicles are now being sold in its shopping centers. To circumvent impending EU tariffs, BYD is building production capacity in countries such as Hungary and Turkey. This local presence protects margins and secures access to key growth markets. The stock is currently trading at EUR 11.595.

Volkswagen – Caught in a whirlwind of adversity

The ride is becoming increasingly bumpy for Volkswagen. A perfect storm of geopolitical tensions, sluggish demand for electric vehicles, and domestic structural change is weighing on the group. The latest profit warning, triggered by Porsche's delayed launch of its electric SUV, is just the tip of the iceberg. Added to this are overcapacities, which led to the temporary shutdown of German plants, and a billion-dollar write-down at the luxury subsidiary. Margins are under pressure, and revenue is stagnating. The challenge is to grow profitably in a fiercely competitive market, while the industry has to invest billions in transformation.

But there are also rays of hope amid the headwinds. The electric offensive is showing impressive results in many regions. Deliveries of fully electric vehicles have risen by over 40% globally, and by as much as 85% in Europe and the US. In addition, the group is pushing ahead with a comprehensive cost-cutting program and making targeted investments in AI to save billions over the long term. The PowerCo battery division is also slowly gaining momentum, even though production in Europe has been delayed. These internal levers are intended to strengthen resilience and reduce dependence on unpredictable external factors.

However, the greatest uncertainties lie outside the Company's own factory gates. The tense situation in the semiconductor supply chain, exemplified by the Nexperia crisis, reveals the fragility of global supply chains. Tariffs and the threat of a trade war between the US and China threaten to stifle the economy further. For Volkswagen as a global player, this is a grueling situation. The strategic focus is now on cost control and more efficient processes in order to survive in a challenging environment, while hoping that the political waves will smooth out and global demand for vehicles will rebound. Currently, one share costs EUR 91.00.

China's new lithium export controls are forcing the industry to take a clear stance. As a mining company with a polymetallic project in Québec, Power Metallic Mines is benefiting directly from rising commodity prices and the geopolitical search for diversified supply chains. Thanks to its unique vertical integration and skilful market development, BYD is also pursuing a resilient course in the global trade conflict. The situation is quite different for Volkswagen: the German automotive giant must contend with supply risks for battery raw materials and chips while pushing ahead with its transformation.