Ford has announced a series of deals to increase its supply of lithium in order to meet its ambitious targets. The company has entered into numerous and various forms of agreements & partnerships with the likes of Albemarle, and Compass Minerals International. This is a response to the fact that Ford’s overall costs were $7bn higher than its peers. These higher costs stemmed from a lack of suppliers and continued operational difficulties around manufacturing their EVs. These new agreements should help resolve, part of the ongoing problems. These agreements also fulfil the IRA’s mandate of sourcing raw materials from the USA (and from its free trade partner countries) to receive the $3,750 consumer tax credits. In the long term, this will help Ford ramp up EV production.
Northvolt, in a joint venture with Galp (a Portuguese oil and gas company), is building its first lithium refinery in Portugal. This is a significant milestone for Northvolt, as the company is seen as Europe’s leading competitor to large Asian battery makers, such as CATL and LG Energy. From H2 2025 the refinery is aiming to produce 52k tonnes of battery-ready lithium hydroxide a year, which is enough to produce the batteries needed to replace 650k ICEs annually.
Gotion High-Tech, a Chinese EV battery company, has stated that it has created an EV battery with a range of 1,000km (620 miles). If this is true, this would certainly change the EV market dynamics and uptake trajectory. The battery, called L600 LMFP Astroinno, has passed all necessary safety tests and will start to be mass-produced in 2024. Interestingly, this battery does not rely on NCM (nickel manganese cobalt) and can still achieve more than 4,000 cycles at room temperature and 1,800 cycles at high temperature, alongside being able to fast charge in 18 minutes. In terms of battery design, the company has also reduced the number of structural parts by 45% and lowered its weight by nearly a third, while the wiring required has fallen from 303 metres to 80 metres. If all these claims are true, VW will be one of the early winners, as Gotion is already a supplier.
BMW has announced plans to launch (this summer) the seventh generation 7 Series with 2 new electrified variants and an all-wheel drive option for the 6-cylinder 740i, alongside expanding the i4 line-up with the all-wheel-drive i4 xDrive40. This is a progressive step by BMW and illustrates the company’s commitment to electrification.
Polestar and Candela have announced the launch of the Candela C-8 Polestar edition. This is the next step in their collaboration, which marries Polestar’s EV design with Candela’s electric hydrofoil boat.
Ford held a Capital Markets Day, with the focus once again, on the company trying to convince the market it can hit its lofty targets. The company plans to manufacture 600,000 EVs by the end of the year and from 2026 onwards, will hit 2 million EVs annually. The CEO stated that this year, he expects the company to lose c.$3bn from its EV segment this year, however, this will be offset by profits in its traditional ICE segment. The projected loss has been factored in by analysts, it is the growth projections, without any clear planning, that concerns analysts. It appears the Capital Markets Day did little to soothe said concerns.
XPengQ1 23 results were underwhelming, as sales saw a 45% decrease YoY to $587.31m, this was well below analyst consensus, which had it pencilled in for $741m. Gross margin is down to 1.7% compared to 12.2% in Q1 22, whilst delivering 18,230 vehicles. The company states that earnings suffered due to lower vehicle deliveries and the end of Chinese subsidies. Another point of concern was the company’s muted outlook for the rest of the year, guiding for 21,000-22,000 deliveries, which is below the consensus of around 24,000. This is being driven by the lack of consumer demand for its G9, however, the company hopes the G6 (launching next month) will provide a boost.
Jaguar Land Rover (JLR) has chosen the UK over Spain, to build its new EV battery factory. This is a significant win for the UK car industry, as the majority of OEMs have dismissed the UK as a viable option for EV (related) production factories due to Brexit. The British government has also not implemented progressive EV policies, over a number of years, to create/stimulate a UK EV production market. Although there is no data yet, we agree with the industry conjecture that the government must have offered a lucrative subsidies/incentives package to JLR. It will be interesting to see if this spurs other OEMs to view the UK (with government support) as a viable option.
Osprey Charging has installed 16 charging points in Devon, by the A38. The company claims that the purpose-built 1.6-acre site at Buckfastleigh is the biggest hub of its kind in the southwest.
Arnold Clark, one of the largest car dealer groups in Europe, is offering a free home charger and installation until June 30th, to incentivise sales. This offer is worth £929 and includes an untethered EVEC smart charger installed by Bumblebee.
Deals
Bolt continues to make inroads, in acquiring Tier, which is a German micro-mobility startup. Both companies are in late-stage acquisition conversations, hoping to close the deal in the coming weeks. This acquisition comes amid a wave of consolidation sweeping the micro-mobility sector as growth capital remains hard to come by and businesses remain expensive to run.
Brompton, a British manufacturer of folding bicycles, has obtained £19m in investment, led by BGF. This capital will be deployed to increase its global footprint and also expanding operational capabilities.