Close menu

October 12th, 2021 | 11:55 CEST

NIO, Defense Metals, Plug Power - It is getting critical

  • RareEarths
Photo credits:

Today we are faced with ever-tighter climate targets on the one hand and the availability of critical minerals for a safe and fast energy transition on the other. The disparity between scarce supply and steadily increasing demand is widening. There has been a threat of extreme scarcity and a crashing failure of the widely announced climate change for many years. The few producers of strategic materials are likely to have a bright future.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: NIO INC.A S.ADR DL-_00025 | US62914V1061 , DEFENSE METALS CORP. | CA2446331035 , PLUG POWER INC. DL-_01 | US72919P2020

Table of contents:

    NIO - Enormous growth

    The electric car industry is growing rapidly, and so is the demand for minerals such as copper, lithium, nickel, cobalt and rare earths. Rare earths are globally abundant, but the concentration level in the ground is low, and separation from other elements requires special and expensive technologies. These are needed, among other things, in the production of permanent magnets, which are then used in electric motors.

    The strong growth in demand for critical elements can be seen, for example, in the sales figures of the Chinese electric car manufacturer NIO. In September alone, China's highest-producing mobility startup brought 10,628 electric vehicles to customers, a 126% increase over September 2020. Looking at the quarter, NIO doubled its deliveries compared to the third quarter of last year.

    It is not for nothing that the US investment bank Goldman Sachs sees rosy times ahead for the Chinese company. The analysts' verdict was raised from "neutral" to "buy", and the experts see the price target at USD 56. Based on the current price level of USD 36.40, this offers an opportunity of over 50%.

    Defense Metals - Option against scarcity

    The United States imports around 80% of its requirements for rare earths from China, while European industry orders 98% of its needs from the Middle Kingdom. The dependence is enormous. In addition, the still ongoing trade conflict threatens further supply chains. In contrast, pure rare earth projects outside are rare. Already this called the governments of the western industrial nations into action to boost production ex-China through subsidies and tax breaks. However, it takes between 5 and 10 years to get a new project into production.

    Defense Metals in British Columbia has a project well advanced. The 1708-hectare Wicheeda concession, in which the Canadians have an option to acquire for 100% of the deposit in their pocket, has indicated mineral resources of 4,890,000t of light rare earth elements and inferred mineral resources of 12,100,000t averaging 2.90% light rare earth elements.

    It was recently announced that 1,500 meters in eight diamond drill holes had already been completed during this year's drilling campaign in mid-September. A second diamond drill rig has now been brought in to further accelerate the completion of the program to expand and delineate the SEE resource. As a result, exploration targets for the annual program are expected to be achieved sooner than previously forecast. Originally, finalization was anticipated by the end of November.

    Investors were impressed by the positive progress. As a result, the share price of Defense Metals rose to just under EUR 0.20 in Frankfurt in recent weeks. Should the resistance at the current level be sustainably broken, the next chart-technical obstacle is to be found in the area around EUR 0.25. However, despite the increase, the stock market value of the rare earth play is still a manageable EUR 15.23 million.

    Plug Power - Important step

    A beacon of hope for the energy turnaround is the US fuel cell producer, Plug Power. The analysts of the British Barclays Bank take a somewhat more skeptical view and have upgraded their rating for the stock from "underweight" to "equal weight". However, the experts only see a target price of USD 27; Plug Power is currently trading marginally above this at USD 27.18.

    Strategically, the US could score by establishing a joint venture to build a hydrogen economy in Asia. Accordingly, a partnership was announced with SK E&S, part of the South Korean SK Group, according to which the two parties want to accelerate the development on the Asian markets. Through the joint venture, hydrogen fuel cell systems, hydrogen fueling stations, electrolyzers and green hydrogen will be offered in the Korean and other Asian markets.

    At the current level, consolidation is taking place. A breakout above the USD 28.20 mark would brighten the chart picture considerably.

    Without strategic raw materials, the ambitious goals of politics concerning climate change can hardly be met. Rare earth metals come 80% from China, and demand already exceeds supply. The Canadian Company Defense Metals is at an advanced stage and should benefit from the shortage in the long term. Also attractive at current levels are NIO and Plug Power.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by Stefan Feulner on December 1st, 2022 | 09:46 CET

    BYD, Auxico Resources, Hensoldt, Rheinmetall - Prepared for the future

    • Mining
    • Gold
    • RareEarths
    • Defense

    Russia's invasion of Ukraine at the end of February this year changed everything. While global stock markets fell into a state of shock, shares in defense companies boomed. With the arms buildup in the Western world, the future looks bright for companies that were still viewed critically before the war of aggression. However, in order to produce enough tanks, aircraft and other war equipment, the industry needs a variety of critical metals for which demand already exceeds supply.


    Commented by Nico Popp on November 28th, 2022 | 12:25 CET

    Is this patent causing a rare earths quake? Nordex, Defense Metals, BYD

    • Mining
    • RareEarths
    • Defense
    • renewableenergies

    Wind power is a crucial component of the energy transition. Rare earths are used to increase the efficiency of wind turbines and electric motors. Dysprosium and terbium, in particular, are in demand. But although rare earths are anything but rare, they are only found in a few regions worldwide. Scientists at Darmstadt Technical University have now developed processes to use rare earths more efficiently. We explain the technology and shed light on three stocks related to rare earths.


    Commented by Armin Schulz on November 23rd, 2022 | 12:10 CET

    K+S, Defense Metals, RWE - Profiting from stocks that fight shortcomings

    • Mining
    • RareEarths
    • fertilizer
    • Investments

    The first supply chain problems occurred during the Corona Pandemic. With the outbreak of the Ukraine conflict, further deficiencies of Western countries were exposed. It has been known for a long time that the US and Europe are dependent on raw materials and energy from Russia and China. The Middle Kingdom, in particular, already has a monopoly on critical raw materials such as rare earths and tungsten. There has been a minor trade war between the US and China for some time now. Russia has supplied both Europe and the US with cheap energy. Now in times of tension, the dependencies are coming out in the open. So today, we look at three stocks that can combat the shortage.