Great Wall Motor is in the process of investing (up to) $30m for a new battery pack assembly plant in Thailand. The company is also considering establishing an R&D centre in Thailand which would focus on battery-powered pickup trucks. This could help Great Wall Motor eat up some of Toyota’s and Isuzu’s dominant market share in that region. Thailand, the world's 10th largest auto manufacturing economy, is planning to use tax cuts and subsidies to help convert about 30% of the country's annual production of 2.5m vehicles into EVs by 2030.
Deutsche Bank analysts have a bleak outlook for XPeng if the new SUV G6 launch goes poorly next month. XPeng’s recent Q1 results were poor with significantly low margins and a high cash burn rate standing out as 2 red flags. This led to Deutsche analysts claiming, if the G6 performs badly, this may be the end of the road for XPeng. This comes a month after Brian Gu (Vice-Chair) stated that he believes only 10 EV companies over the coming decade will survive. Hopefully, the G6 is a success and XPeng is one of those 10 companies that survives and thrives, we will find out in Q3 earnings if that is the case.
GM and Posco, in a joint venture (JV), have secured half of the financing for a $442m EV battery component plant in Quebec from the provincial and federal governments. This is to support the development of a Cathode Active Material (CAM) processing facility. According to GM, cathodes represent about 40% of the cost of a battery cell. Interestingly, 15% of the C$6bn FDI made in Quebec have been in EV battery supply. This CAM JV will help facilitate the production of EVs including Chevrolet, Cadillac, GMC, and Buick models in North America. The CAM facility is pencilled to begin production by 2025.
A study conducted by Frontier Economics has found that the proposed Euro 7 regulation will significantly increase the manufacturing costs of cars, vans, trucks, and buses. The study conducted calculated costs would increase 4 -10x higher than the Commission’s estimates in its Euro 7 impact assessment. These estimates comprise direct manufacturing costs only, primarily for equipment and investments.
Savannah Resources has announced that the Portuguese regulators have issued a positive declaration of environmental impact for its Barroso lithium mine. This is positive news, as Savannah plans to produce enough lithium for 500,000 EVs a year. This is a significant boost for the European EV market, as it helps the region become less dependent on Chinese exports. This decision by the Portuguese regulators allows Savannah to proceed with economic studies and take the final licensing steps over the next year. The company is aiming for its first production to begin in H1 2026. However, although this is positive news, Europe only produces less than 1% of the world’s supply of lithium.
Mr Musk visited his Shanghai gigafactory, in a bid to illustrate how important China is to Tesla’s future. This visit has been well received by analysts, as it signals how highly Mr Musk values his Chinese employees and the Chinese market. Whilst also meeting with political dignitaries to make sure he/Tesla is aligned with the Chinese Communist Party. To recount, China accounts for 50% of Tesla’s vehicle sales and 20% of its production capacity.
Farizon Auto, a Geely Holding brand, has introduced its Farizon G Truck Product Series, featuring 3 innovative new energy products: the Farizon G pure electric heavy truck, Farizon G methanol hybrid heavy truck, and Farizon G reformed methanol fuel cell heavy truck.
bp Pulse is upgrading its charging network across 14 locations in Milton Keynes. This upgrade comes due to around 25 legacy 7 kW on-street units reaching the end of their service life. bp Pulse is working with Milton Keynes City Council to deliver the 2nd phase of its 7 kW and 50 kW installs. bp Pulse has been very active in recent months, in ramping up its on-the-go charging offering and around 70% of the UK population live within 5 miles of a bp pulse rapid or ultra-fast charge point.
Weev, a Belfast-based EV company, is launching a major charging point rollout in Northern Ireland, backed by £50m from Octopus Investments (Octopus Sustainable Infrastructure Fund). The Department of Transport has stated that in Northern Ireland only 20 per 100,000 people, have access to charging points, this is much lower compared to the UK average of 60. Weev intend to remedy this, with its rollout. This is also the first investment by Octopus Sustainable Infrastructure Fund (OSIF). OSIF is targeting next-generation infrastructure projects.
Deals
Applied Intuition, a USA tooling and software provider for autonomous vehicle development, is acquiring Embark Technology, a USA autonomous trucking software company, for c$71m in an all-cash transaction. Applied will integrate Embark’s internal tools, data, and software assets to further improve its offerings for customers in the trucking and automotive industries.
Chalo, an Indian bus software startup, has raised $45m in a Series D funding round led by Avataar Ventures. This capital will be used to scale up its international footprint and deepen its mobility product offerings. India’s bus market holds a potential $20 billion opportunity.
Spotlight: ScotZEB 2
On the 15th of May 2023, the Scottish Government launched ScotZEB2, which has £58m in new grant funding available. Applications are open from May 15th to Sept 15th and the Energy Saving Trust (EST) has been appointed to administer this programme.
There is a strong emphasis on sharing infrastructure between multiple users, which they see as crucial in facilitating the transition of road fleets to zero emissions, alongside championing the smaller operators. In our view, ScotZEB 1 funding was geared towards the bigger bus operators (and their subsidiaries), such as First Bus and Stagecoach. Although collaboration between different parties was encouraged, it was not a pre-requisite, however for ScotZEB 2 it is. ScotZEB 2 funding, can only be accessed through collaboration between financiers, manufacturers, community transport organisations and infrastructure providers. Having an infrastructure that is open and modular, so it can be used by other ZEVs, especially by HGVs, is subtly emphasised in the guidance report.
Only consortium bids will be considered, and the consortia requirements are:
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At least 1 company providing private finance, and
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At least 2 SME bus or coach operators, and/or 2 community transport operators.
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They define an SME as having a total staff headcount lower than 250 employees and either turnover being under €50m per annum, or a balance sheet total value less than €43m.
- Operators/subsidiaries under the same ownership/parent group will be considered as one company for the purposes of ScotZEB2.