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 André Will-Laudien on September 26th, 2023 | 07:45 CEST

    Artificial Intelligence in Sellout! Nvidia, Defense Metals, ARM Holdings - Nothing works without rare earths!

    • Mining
    • RareEarths
    • AI
    • chips
    • Investments

    After long bull market movements, the stock market usually tends to rotate sectors, or the market enters a general consolidation. In the former case, investors can profit by reallocating their assets while exploring new investment opportunities. In the latter case, all stocks come down, and the capital market generally suffers from a change in sentiment and corrects recently exaggerated valuations. In the case of the new megatrend of Artificial Intelligence (AI), the stock market seems to sense a great need for correction. As if by magic, the blockbuster stock Nvidia rose by 250% in just 9 months. However, it has already retraced nearly 20% from its peak. Where do the opportunities lie for investors?


    Commented by Armin Schulz on September 12th, 2023 | 08:05 CEST

    NVIDIA, Defense Metals, Alibaba - Tensions between China and the US are on the rise again

    • Mining
    • RareEarths
    • chips
    • Investments

    During the BRICS summit, it was announced that six new countries will join the alliance on January 1, 2024. These countries include Saudi Arabia, Iran, the United Arab Emirates, Argentina, Egypt, and Ethiopia. This development might not sit well with the United States, as it could threaten the dominance of the US dollar. In addition, there are tensions with China over Taiwan. In July, the Middle Kingdom limited exports of rare earths. China has now added fuel to the fire by banning government officials from using iPhones. Before this, the US restricted exports of NVIDIA's AI chips to the Middle East. Tensions are rising, making it a good time to look at three companies affected by these developments.


    Commented by Stefan Feulner on September 8th, 2023 | 07:00 CEST

    Meeting climate goals in conflict: Who benefits from China's raw materials dominance? Rheinmetall, Defense Metals, BYD

    • Mining
    • RareEarths
    • Electromobility
    • armaments

    In the ambitious pursuit to meet climate targets, both political and economic players are taking a risky step. The rapid shift away from fossil fuels in favor of alternative energy sources is leading to a marked increase in the consumption of metallic raw materials that are essential for building renewable and energy-efficient systems. In particular, copper, cobalt, nickel and rare earths, whose imports come mainly from China, are experiencing rising demand. Moreover, with the outbreak of the conflict in Ukraine, the defense industry's interest in these resources is intensifying. Producers of critical metals outside of China could emerge as winners in this development.