Benchmark Mineral Intelligence reports lithium prices in China reached new highs this week as sales of new energy vehicles across the country last month also hit an all-time high; GM does a deal to secure supplies of nickel and cobalt from a small Australian metals company; BMW is making inroads into the Chinese EV market; another roadblock for Rivian; and Amazon making noise about electrifying its transport fleets across Europe – it has indeed been a busy old week in the lithium and electric vehicle space.
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Benchmark reported that Chinese battery grade lithium carbonate rose by 1.7% over the past week to reach an all-time high of $US74,475 a tonne, more than doubling so far in 2022.
Prices for lithium hydroxide, which is used in batteries with high nickel content is up nearly 150% this year at $US73,925 a tonne this week, according to the Benchmark.
According to Benchmark lithium prices have risen for 24 straight months as the EV market continues to expand with global sales of electric vehicles topping one million for the first time in September, thanks to China’s record sales of 675,000 units last month.
Spot prices for lithium hydroxide (delivered to China) averaged $US70,300 a tonne in August this year, according to the September edition of Australia’s resource and energy quarterly.
That was down slightly from the April peak of $US74,688, but still more than eight times the $US7,984 average at the start of 2021.
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Although the September quarter sales data on electric and new energy vehicles from China confirmed lead BYD, the Chinese giant, and Tesla (supported by its quarterly sales figures) have on the rest of the car industry, German luxury giant, BMW is starting to see startling rapid growth in its sales of EVs.
Tucked away in its September quarter report this week was news that the company had more than doubled sales of its Battery EVs (BEVs) in the first 9 months of 2022.
BMW said it sold a total of 128,196 fully-electric BMW and Mini vehicles up to the end of September, up 115% on 2021’s sales.
BEVs sales were 7.3% of BMW deliveries reach 1,747,889 units for the 9 months to the end of September.
‘The dynamic growth of our fully-electric models reflects how the BMW Group’s electric lineup is winning over customers – as we continue to press ahead with the transition towards electro-mobility,’ said Pieter Nota, member of the Board of Management of BMW AG who oversees the car giant’s Customer, Brands, Sales operations (head of marketing).
In the month of September, BMW total group sales were up 6.6%, with 210,543 vehicles delivered to customers. In the third quarter, 52,306 all-electric BMW and MINI vehicles were delivered to customers (up 121.6%).
Besides the BMW iX3, the company said its two “innovation flagships,” the BMW i4 and the BMW iX, “continue to drive growth, with particularly strong new orders.”
“Additional momentum will come from the BMW brand’s two newest fully-electric models, the BMWi7 and the BMW iX1. Both models, like the all-electric long-wheelbase version of the 3 Series in China, are receiving very positive customer feedback,” BMW said.
“The all-electric MINI Cooper SE is also seeing strong growth and is an important pillar in the BMW Group’s fully-electric model line-up. The company is therefore on track to double its sales of fully-electric vehicles for the year 2022.”
BMW said 2023 will bring further models, including the BMW i5 and the battery-powered Rolls-Royce Spectre EV, which will make its world premiere in a year’s time.
With this fast-growing range of products and high demand, the BMW says itis on track to have more than two million fully-electric vehicles on the roads by the end of 2025.
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Another major hiccup for electric truck maker Rivian Automotive, whose shares tumbled more than 7% on the embarrassing news of an almost total recall of all the vehicles it has made since start up in 2021.
Rivian announced that the recall in case a small fault (a dodgy small fastener worth a few cents each) in the steering meant drivers of the vehicles could lose control.
The Amazon-backed firm recalled about 13,000 vehicles due to a possible loose fastener that could cause a driver to lose steering control.
Rivian has so far delivered 13,198 vehicles since it started selling in the third quarter of last year.
“We have greater concerns on 2023 production expectations,” RBC Capital Markets said in a note on Monday. The addition of battery packs and motors as well as downtime required at the plant to ramp up capacity could derail Rivian’s pace of production, it said.
Rivian’s shares have fallen 67.3% this year due to a selloff in equities driven by an uncertain macroeconomic environment and a production forecast cut.
In March Rivian cut its annual production forecast in half to 25,000 due to sticky supply-chain issues.
A local court in Georgia, where Rivian is building its $US5-billion manufacturing plant, last week rejected a joint proposal by the state’s Department of Economic Development and the company to secure local incentives for its project in the state.
According to Reuters, the local development authority had said in May the company would gain incentives of $US1.5 billion from the Georgia state government.
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Amazon meanwhile has revealed ambitious plans to electrify its European vehicle fleets over the next five years (if Rivian can get the manufacturing right), revealing plans to spend more than 1 billion euros, or around $US1 billion.
Besides investing in electric vans and trucks Amazon will spend money on low-emission package hubs across Europe, as it hastens its drive to achieve net-zero carbon by 2040.
Amazon said the investment was also aimed at spurring innovation across Europe’s transportation industry and encouraging more public charging infrastructure for electric vehicles (EVs).
The company wants to triple the size of its European electric van fleet from 3,000 vehicles to more than 10,000 by 2025.
The company did not say what percentage of its European last-mile delivery fleet is electric today, but said those 3,000 zero-emission vans delivered over 100 million packages last calendar year.
Amazon said it also hopes to purchase more than 1,500 electric heavy goods vehicles – used for “middle-mile” shipments to package hubs – in the coming years.
Although various large logistics firms – including package delivery companies United Parcel Service Inc and FedEx Corp – have committed to buying large numbers of zero-emission electric vans and trucks, there are nowhere as many models available for buyers to choose from as there are consumer EVs such as Teslas.
A number of start-ups are racing to bring electric vans or trucks to market and are facing increasing competition from legacy manufacturers like General Motors Co and Ford Motor Co.
Amazon’s largest electric van order is for 100,000 vehicles from Rivian Automotive through 2025. It also has a deal to EV based delivery units from Stellantis based on its Ram ProMaster commercial van.
Amazon also has truck and van orders with Mercedes Benz (Daimler), Lion Electric and Volvo. With the existing orders that’s another billion euros or more.
Amazon said that alongside EVs, it will invest in thousands of chargers at facilities across Europe.
The retailer said it will also invest in doubling its European network of “micro-mobility” hubs from more than 20 cities today.
Amazon has used those centrally located hubs to run new delivery methods including electric cargo bikes or on-foot deliveries to cut emissions.
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The news from Amazon and BMW, as well as from the Chinese motor vehicle market should be music to the balance sheet of CATL, the world’s biggest EV battery maker.
Not that it needs a profitable tune – it’s already on track for its profit to triple in the three months to September 30, according to a stock exchange statement in China this week.
CATL accounts for more than a third of global EV battery sales, although that figure is slowly falling.
CATL, a supplier to Tesla in China said it expects its third-quarter net profit to increase to between 8.8 billion yuan ($US1.23 billion) and 9.9 billion yuan, up from 3.3 billion yuan last year.
It also expects net profit for the first nine months of the year to more than double from a year-ago period.
“The company … has ramped efforts in market expansion in addition to the capacity planned earlier,” CATL said in the filing. “Production and sales significantly increased, which helped to secure its persistently leading position in the global market and result in the rapid profit growth.”
CATL has accelerated its expansion into overseas markets with contracts to supply batteries to major carmakers including Mercedes Benz Group and BMW in Europe and Ford Motor Co in the United States.
The Chinese firm announced in August that it would build a $US7.6 billion battery plant in Hungary, Europe’s largest so far.
To offset rising costs of battery materials, CATL has taken measures including signing long-term contracts with suppliers in China, Australia and elsewhere, recycling materials and negotiating a dynamic battery pricing scheme with automakers.
Despite the bullishness, CATL shares have lost more than 30% so far this year.
