- Special Focus - Oil vs Battery Vehicle - breakeven
As per existing battery costs, the breakeven between Electric Vehicles and traditional internal combustion vehicles (NYSE:ICE) will happen by 2025. This calculation assumes that the cost of batteries will come down with improvements in technology and scale to around $100/KWh by 2025 from the current $200/KWh. However, if we flip the calculation around, holding the current battery prices constant, EV/ICE breaks even at $180/barrel - implying that if crude oil prices were to reach $180/bbl today, one will become indifferent between a gasoline car or EV purely on a cost basis.
2. EV Updates - Upstream
a. LG Chem Inks Deal to Secure 7,000 Tons of Lithium Hydroxide per Year from Canada with Nemaska Lithium
b. Production for the second quarter ending June at Australia-based Orocobre’s Olaroz Lithium Facility in Argentina was the second highest ever achieved at 3,596 tonnes, up 28% on the first quarter
3. EV Updates - Downstream
a. In a sign of Chinese investment in battery technology paying off, BMW has recently replaced Samsung SDI with China's CATL for its cars in Europe. This comes on the back of the company planning to invest in a plant in Thuringia, Germany. Last month Daimler also contracted CATL to make some batteries for its EU sales.
b. BYD has opened its third plant in China in the Qinghai province. This is its third factory in the country after Shenzhen and Huizhou. This new 24 GWh plant will add to its plan of having 60GWh capacity by 2020.
c. Chinese carmaker Dongfeng and CATL's joint battery plant starts operations in the Wuhan province of China.
d. Nissan calls off its plans to sell its battery plant to China's GSR Capital, stating that the Chinese firm was not able to raise capital for it. Nissan plans to sell off its unit to improve its cost competitiveness and invest in other technologies like Autonomous driving. As a next step, Nissan would try to engineer a deal for the business with battery suppliers to the broader Nissan-Renault-Mitsubishi Motors alliance, which include LG Chem Ltd., GS Yuasa Corp. and Toshiba Corp.
GSR, backed by the Hubei provincial government, has been pouring money into battery-related businesses overseas, including a $500mn investment in National Electric Vehicle Sweden AB and a partnership with Turkey’s Zorlu Holding for $4.5 billion in investments over five years.
e. Johnson Matthey will be building its test plant of its eLNO material in Clitheroe, UK. The plant will have a capacity to produce 1000 tonnes of the material as sample for its customers. It will be building its main plant in mainland EU and is expected to commence production in 2021.
The cathode material scores higher than all of the existing technology in terms of energy density at a lower cost. It uses a coating of Zirconia Oxide, which has a chemistry complementary to PGMs already sold by JMAT.
f. Cummins will be acquiring a company, Efficient Drivetrains Inc., in a bid to lead the global electrified power market. In the last year, Cummins has acquired Brammo Inc as well as the automotive battery systems business of JMAT.
g. BYD and Changan Automobile ink a cooperation agreement on establishing a battery joint venture in Shenzhen. The two companies also recently signed agreement in cooperation in the Electric Motors segment.