January 25th, 2023 | 13:51 CET
Take cover - Tesla reports figures today! BYD, NIO, Power Nickel, BASF: Here we go with e-mobility!
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BYD and NIO - Things are looking up in China
The annual figures for 2022 have yet to be reported. However, BYD is already reporting large orders at the start of the year, this time from Europe - the largest Chinese automotive group recently landed another order from Spain. Instead of its range of electric cars presented in Paris, this order involves BYD's electric buses. These are to be used in a Madrid suburb in the future. The order for 15 buses was placed by Empresa de Blas y Cia, a Spanish subsidiary of the British transport company Arriva. On the Hong Kong stock exchange, the share has been rising since the beginning of the year. The favourite stock of German investors has already gained 16% to EUR 27.30. The high from 2022 is admittedly yet to be reached and is still 60% away.
Tesla competitor NIO was able to report strong sales figures at the end of the year. In December, there was a new monthly record of 15,815 vehicles, an increase of 51% compared to November. Contributing to this strong growth was the ES7 premium SUV, which NIO began delivering in August 2022. In this context, NIO offers its vehicles with a Battery-as-a-Service option. If the customer opts for this subscription model, they do not purchase the battery but rent it. In this way, the manufacturer can maximize the intensity and duration of use of the battery as far as technically possible. For the end customer, this means that the purchase price for the vehicle drops considerably.
NIO differs from Tesla and other competitors in that it relies on battery exchange stations. Here, empty batteries can be exchanged for full ones within about 5 minutes. That saves time, and the customer is not dependent on public charging infrastructures. NIO users can also charge their vehicles at charging stations, but this takes just as long as with the competition. The NIO share price fell by 50% in 2022 but is now slightly on the rise again.
Power Nickel - A battery metal with the highest regard
The raw material nickel went on a real roller coaster ride in 2022. At the beginning of the year, there was a short panic on the London Commodity Futures Exchange due to technical delivery difficulties. The price shot up by a factor of 3 to USD 100,000 per ton within 24 hours. Then the price was suspended, and when nickel started trading again, the important battery metal fell back to below USD 20,000 per ton. Towards the end of the year, the price landed back at around USD 30,000 - a level that currently roughly corresponds to the market balance. Nevertheless, nickel is relatively rare and is needed in many industrial processes, especially in steel refining and battery production. The success of the common NMC cathodes is due to the combination of nickel and manganese; the nickel brings a high specific energy density to the material. 75% of the world's production comes from Russia. Since the start of the Ukraine war, there have been enormous shortages of nickel, and car manufacturers are desperately looking for alternative sources of supply. Several projects are therefore getting underway in North America.
Canadian explorer Power Nickel (PNPN) has a flagship project called NISK in Quebec. With mineralization for nickel, copper, cobalt, palladium and platinum, NISK slays nearly all the major future metals in one property. CEO Terry Lynch is a staunch climate change activist. He wants to purchase a CO2 offset from KARBON-X for his planned 40,000 meters of drilling, neutralizing 159 tons of greenhouse gases. These are released by the consumption of 60,000 liters of diesel. Offsetting industrial applications is an important part of KARBON-X's business. Power Nickel's CEO is pioneering ways to strike an environmental balance between pollution and atmospheric protection. "Miners are some of the most environmentally friendly people I know, and we need to show the world that we can find responsible ways to find the materials needed to green our economy," he comments on his important venture.
With its NISK project, Power Nickel is well-positioned to supply high-quality nickel and other metals for the Greentech industry. PNPN- shares have done well since the beginning of the year, doubling smoothly from CAD 0.11 to CAD 0.22 since October. The market capitalization is still very attractive at around CAD 26 million. Collect!
BASF - The standard value among suppliers of battery materials
We have discussed the BASF share many times since the Ukraine invasion by Russia. In the end, the horror scenario of gas undersupply has yet to materialize despite the now colder temperatures in Germany. This is also due to the clear willingness of the population to save, which has so far been able to reduce its consumption by almost 20%. Gas storage facilities are currently filled to around 86%, corresponding to a historical surplus of about 4% on this calendar day.
The BASF Group is one of the largest gas consumers in Germany. In addition to many basic chemical products and precursors for consumer goods, the Ludwigshafen-based company is also one of the world's largest manufacturers of cathode material used in battery production. BASF has made a strategic decision to invest EUR 10 billion in China. Of course, this decision was made before Germany's energy woes set in. In retrospect, of course, this is a lucky punch because the local industrial base will continue to suffer for decades from the gas shortage caused by the loss of Russia, its most important supplier. In mid-January, BASF had to issue a profit warning due to high write-downs on the Eastern European business of its subsidiary Wintershall. As a result, the DAX-listed group is sliding into the red for 2022.
Shareholders immediately took advantage of the brief downward price swing to repurchase BASF shares. The write-down on Wintershall was readily expected and is cash-neutral. Most recently, the rise in the ifo index provided the real reason why BASF has probably already seen its low of around EUR 38. That is because international business is doing splendidly due to the weak euro and the unique global market position means that the increased production costs can also be passed on to customers. We remain invested and tighten the stop line to EUR 48.
Climate protection also sets the agenda for the new year. E-mobility continues to be hailed as the bringer of salvation, but this is not scientifically proven. After all, with the loss of subsidies, an e-mobile must now convince its buyer through higher performance compared to combustion engines. BYD and BASF are important standard stocks in the portfolio. Canadian Power Nickel is a new, exciting player in the market for battery metals.
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