October 20th, 2022 | 13:01 CEST
Shares: Porsche does it like Tesla - Varta is not there, and Infinity Stone Ventures?
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"[...] In 2020, the die is finally cast in the automotive industry towards electromobility. [...]" Dirk Harbecke, Executive Chairman, Rock Tech Lithium Inc.
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Porsche: Following in the footsteps of BYD and Tesla
Porsche is finally getting serious about battery production. Instead of the initially planned capacity of only 100 megawatt hours per year, the battery factory in Reutlingen is to be expanded to 1 gigawatt hour. This will enable it to equip not just 1000 but 10,000 vehicles per year with batteries from 2025. These are to be high-performance batteries of the next generation. The Zuffenbau-based company is investing heavily to implement these plans. EUR 60 million has already been invested in the plant in Reutlingen. The federal and state governments are giving a further EUR 60 million as part of a development program. In order to secure state-of-the-art technology, Porsche has invested USD 100 million in Group14 Technologies. The US company is said to be a leader in silicon-carbon technology for lithium-ion batteries and is working on a real "game-changer". The aim is to increase the performance of a battery by 50% using new anode material containing silicon. The advantages would be numerous: faster charging, more range, and better energy recovery during braking. The presence of Group14 CEO Rick Luebbe at the groundbreaking ceremony shows just how close the ties are. "Group14's goal is to improve the performance of today's lithium-ion to accelerate the global energy transition," said Group14 CEO Rick Luebbe. The entire VW Group could benefit from the new technology. VW was the first German automotive group to decide to take over battery production itself as a key technology for the future. VW will invest a double-digit billion amount for this in the coming years.
Other carmakers and battery producers also want to expand their production capacities further. Among others, the Chinese market leader CATL intends to build another European cell factory. In addition to the plant in Erfurt, the second site is to be built in Debrecen, Hungary. One of the customers for the batteries will be Mercedes.
Infinity Stone: Critical raw materials for electromobility
One thing is becoming clear: More and more batteries will be produced worldwide. Accordingly, the demand for raw materials for batteries will increase rapidly. Infinity Stone Ventures (ISV) wants to profit from this. The Canadian company has set itself the goal of being a one-stop-shop supplier for critical energy metals - the focus is currently on battery metals. ISV's seven current projects relate to lithium, graphite, copper, cobalt, nickel and manganese. Important in the current geopolitical environment, all projects are located in Canada.
The Company is stepping on the gas in developing the projects. At the Rockstone Graphite Project in Ontario, preparations are underway for the fall drilling program. The necessary exploration permit has been obtained in the meantime, Infinity Stone announced. This will allow drilling to commence in the first week of November over a length of approximately 600 meters, determining the extent and depth of the graphite mineralization. There are eighteen other drill-ready EM targets on the Rockstone Graphite property. All of the Rockstone drill targets have the potential to also host VMS-type copper/zinc mineralization. "We are pleased to announce the next step in advancing the Rockstone Graphite Project. Rockstone is a core project of the Company and stands out from other natural graphite projects in Canada and worldwide due to its grade and historical workings," said ISV CEO Zayn Kalyan. "With the fall drill program, we intend to expand on the historical drilling and hope the program will confirm the potential for a significant graphite resource in an increasingly tight graphite market that shows no immediate signs of easing." Graphite is an essential mineral for battery cell manufacturing. For example, a Tesla Model S 100D contains 120 kg of graphite.
Varta: Again, not a partner
Looking at Porsche's plans, it can be stated: Varta is again not involved. The Company is not making any headway in its expansion into battery production for electric cars, or at least it is not communicating it. Mass production is scheduled to start in 2024, and test production of 10,000 round cells per week is currently underway. The Company has been in talks with partners and customers for a good year. So far, there has been no concrete news. The rebound of the Varta share after the sharp fall to EUR 28 has also quickly fizzled out. Currently, the share is trading just above EUR 30. The experts at researchanalyst.com are also cautious: investors should hold their observation position until the fundamental scenario for commodity-heavy producers in Germany develops for the better or Varta can demonstrate new successes in some crucial sectors (to the study).
More and more carmakers are focusing on their own battery production. It makes sense because, after all, the battery is the heart of every e-car. Whether Porsche is successful with its expansion remains to be seen. But whether specialists like CATL or carmakers themselves produce the batteries, commodity companies like Infinity Stone Ventures will consistently profit. Unfortunately, it is currently impossible to predict when Varta shareholders will be able to benefit from a sustained increase in the share price.
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