April 8th, 2021 | 09:32 CEST
Volkswagen, Rock Tech Lithium, NIO - It is getting dramatic for Germany!
Metal processing industries and steel manufacturers in Germany are increasingly reporting delivery problems and rising costs resulting from significantly increasing raw material prices. Due to the strong growth in demand resulting from the energy transition, it is becoming increasingly difficult to secure the supply of raw materials in the long term. The dependence on China, which currently has a virtual monopoly on many metals, has been evident for a long time. As early as 2008, the then German President Horst Köhler called for a raw materials strategy for the Federal Republic. Little has happened since then, but the bottleneck is steadily approaching. According to the motto of a former SPD politician: "Germany is doing away with itself."
time to read: 3 minutes
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Author:
Stefan Feulner
ISIN:
DE0007664039 , CA77273P2017 , US62914V1061
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Author
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.
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Rock Tech Lithium - The supplier for Germany
The sales figures of electric car manufacturers are exploding. In addition, new players are entering the market all the time. The disruption of combustion engines by electric cars has picked up speed. In order to reduce dependence on China, the European automotive industry is thinking ahead and is now planning to build battery cell factories to secure the value chain. What is still missing, however, is the raw material lithium. Currently, 80% of this is mined in China and processed into battery-grade lithium carbonate or hydroxide. On the one hand, as the world's largest e-car market, China needs an enormous amount of lithium; on the other, there is a trade war between the Middle Kingdom and the USA. China uses raw materials such as rare earth metals as political leverage.
The cry for European lithium refineries is getting louder and louder. However, even these will not run if there is not enough raw material, i.e. lithium. The Canadian Company Rock Tech Lithium has a solution for two problems and wants to become Germany's lithium supplier for the automotive industry. Rock Tech Lithium could serve the entire value chain. The Company's own lithium sulfate mine in Ontario, Canada, can now be put into production thanks to the capital increase in January. The mined raw material is to be processed into lithium sulfate while still in Canada and further processed into lithium hydroxide in a converter, which will then be the first in Europe. In this way, it will be possible to keep transport costs and environmental pollution low. A first converter could produce 24,000 metric tons of lithium hydroxide per year, corresponding to around 500,000 car batteries.
The state of Saxony-Anhalt in Eastern Germany is favored as a location because of its high production rate. Another advantage would be its central location in Germany's middle and the proximity to Tesla's Gigafactory in Grünheide and BASF's new cathode factory in Schwarzheide. Rock Tech Lithium has big plans! Thus, it should not stop at the first converter. More are already planned for the next few years.
According to the Company, the annual production of one converter of 24,000 tons of lithium hydroxide would be equivalent to a turnover of EUR 250 million and, according to the Company, a profit of EUR 40 million. The stock market value of Rock Tech Lithium is currently just under EUR 185 million.
Volkswagen AG - In the fast lane
Volkswagen is stepping on the gas. While 230,000 all-electric cars were sold last year, the Wolfsburg headquarters is planning on sales of 800,000 in 2021, which would mean they would replace Tesla as the world market leader earlier than forecast. In general, the estimates made last year have been thrown overboard in favor of electromobility. Instead of two cell factories, a total of six are now to be built throughout Europe. Production capacity is to be expanded to 240 GWh per year by 2030. By then, 70% of the cars produced will be fully electric.
In addition to their production, the Germans also want to benefit from the knowledge of their holdings. For example, Volkswagen has held a stake in QuantumScape, a specialist in the field of solid-state batteries, for years. Following a successful series of tests, the investment has now been supported with a further USD 100 million. For VW, solid-state batteries, scheduled to start joint production in 2025, offer two significant advantages. First, solid-state batteries' energy density is higher, meaning electric cars equipped with them have more range, and second, they are said to be faster to charge.
NIO - Extreme growth
The Chinese e-car manufacturer NIO had to contend with supply bottlenecks for microchips and semiconductors. In Hefei, China, the AC-NIO plant had to be closed for 5 days from the end of March because of these supply bottlenecks. However, this did not yet have any impact on the figures for the first quarter. NIO delivered 20,600 units, a growth of 423% compared to the same period last year. In March alone, there were 7257 vehicles. In comparison, NIO ranks second in the sales charts in March behind undisputed industry leader BYD with 23,386 units, ahead of competitors XPeng (5,102 units) and Li Auto (4,900 units).
NIO operates a battery-as-a-service model in China: Instead of charging the electric cars' battery, drivers can have it exchanged for a full battery within a few minutes at one of now almost 200 battery exchange stations.
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