IEA forecasts slower demand growth for EVs

Spanish Market: Battery materials
23/04/24

Sales of electric vehicles (EVs) will continue to grow in most major markets this year, but at a slower rate, according to the latest Global EV Outlook report from the International Energy Agency (IEA).

Global EV sales this year are set to top 17mn, more than a fifth of total global vehicle sales, but growth is expected to slow in major markets compared with 2023.

Almost 14mn new EVs were registered last year, up by 35pc compared with 2022, with almost 95pc of EV sales coming from China, Europe and the US.

China is expected to account for over half of global EV sales this year, down from a share of around 60pc in the past two years, with sales expected to grow by 25pc on the year in 2024, passing 10mn for the first time.

Sales in the US are expected to grow by 20pc on the year to almost 500,000, accounting for an estimated one of every nine new vehicles sold in the country.

Growth in Europe is expected to be the weakest of the three, predicted to rise by just 10pc to around 3.5mn units in 2024. The phase-out of EV subsidies in Germany and other countries is expected to weigh on demand, although EVs are still forecast to account for around a fifth of all vehicle sales in the EU.

Smaller markets such as Vietnam and Thailand are expected to grow by 15pc and 10pc, respectively, this year.

Under the IEA's stated policies scenario, EVs make up half of all car sales by 2035, reducing oil demand by over 10mn b/d, equivalent to the amount used for road transport in the US today.

Chinese exports are expected to rise this year, after more than 60pc of Chinese EVs sold in 2023 were lower in price than their internal combustion engine (ICE) equivalents. Purchase prices for ICE cars remained cheaper on average in the US and EU.

China's largest carmaker BYD hit record monthly export sales in March, as nationwide exports continued to grow, raising concerns from US and EU officials about whether their carmakers will be able to compete.

Charging point installations are also set to increase, after a 40pc rise in 2023 from a year earlier and with particularly strong growth for fast chargers. Charging networks will need to grow sixfold by 2035 to meet EV sales targets set by governments, according to the report.

The IEA also said that policy makers must make sure that the supply of electricity is secure, affordable and emissions-light, while ensuring that electricity demand does not outstrip grid capacity during the transition to EVs.

By Chris Welch

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23/12/24

Japan carmakers Honda, Nissan start formal merger talks

Tokyo, 23 December (Argus) — Japanese automakers Honda and Nissan said today they have officially started merger talks and are aiming to close a deal by June 2025. Fellow Japanese carmaker Mitsubishi is also considering joining the transaction. Honda and Nissan have signed an initial agreement to discuss a merger, including by setting up a joint holding company under which the current brands would operate as subsidiaries. Honda will appoint a majority of the holding company's board members including its president or representative director, Honda's president Toshihiro Mibe said on 23 December. Mitsubishi will make a final decision on whether to participate in the negotiations before the end of January 2025. A Honda representative told Argus on 18 December that the firm was exploring a possible merger with Nissan. Collaboration on the electrification of automobiles is one of the major reasons for the merger, according to Honda and Nissan. The firms agreed a strategic partnership in March to work together on electrification, studying possible areas of co-operation in developing automotive software platforms, core components relating to electric vehicles (EVs) and complementary products. Honda aims to electrify all its new cars by 2040 and is investing ¥10 trillion ($64bn) by 2030 partly to reduce battery costs, which account for around 30-40pc of the total cost of producing EVs, Mibe said in May. Honda's combined sales of EVs and fuel cell EVs (FCEVs) more than doubled to around 42,000 units in 2023, according to the company. But this only accounts for around 1pc of its total sales. Further investments on electrification by a single manufacturer are not feasible, Mibe said on 23 December. Nissan produced 3.4mn vehicles in 2023. It does not provide a precise breakdown for global EV sales, although it said in August 2023 that such sales had surpassed 1mn units since its first delivery in 2010. This is dwarfed by foreign EV competitors, including Chinese producer BYD and US manufacturer Tesla, whose sales exceeded 3mn and 1.8mn units respectively in 2023 alone. The merger is also designed to optimise facilities owned by Honda and Nissan, Mibe said. But he denied that it would lead to a reduction in production capacity or asset cuts. The companies instead aim to expand output, Mibe added, although he did not disclose a detailed plan. Nissan is struggling to make a profit, partly because of weak EV demand. The company's net profit slumped by 94pc on the year to ¥19.2bn in April-September, prompting it to cut global production capacity, including for EVs, by 20pc to around 4mn units/yr. Nissan's financial struggles will not affect its collaboration with Honda, but it needs to accelerate its financial recovery, Nissan chief executive Makoto Uchida said on 7 November. But Mibe suggested on 23 December that Nissan's financial situation could cause the proposed merger to be scrapped. Japan's trade and industry ministry (Meti) has yet to make any official comment on the merger talks. But Meti minister Yoji Muto said on 20 December that restructuring the industry would generally help increase the value of private entity and promote innovation. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Europe’s EV future rests on Chinese FDI

19/12/24

Viewpoint: Europe’s EV future rests on Chinese FDI

London, 19 December (Argus) — The troubled buildout of Europe's EV supply chain, illustrated by the fall of Northvolt last month, suggests that the future now depends on foreign direct investment (FDI) — particularly from China. While EV sales in China rose by 46pc last month , they edged down by 2.48pc in Europe, and an increasing share is made up of Chinese-branded battery EVs , as western carmakers struggle to offer affordable models. China is now forecast to majority-own 300GWh of Europe's 1.3TWh battery capacity by 2030 ( see graph ). A shortage of skilled labour, fierce competition weighing on prices for feedstock materials and limited state investment — just some of the problems that befell Northvolt — suggest that Chinese FDI might need to increase further for Europe to expand its EV fleets. First, FDI into Europe that localises production of EVs that will eventually be sold to European consumers offers jobs to workers and affords Europe a portion of the value added. It offers a chance for technological ‘spillovers' — expertise on how to build and operate Chinese battery machinery in exchange for access to the largest EV market after China. Europe could also attract Chinese FDI under 50:50 joint ventures (JVs) between Chinese battery makers and domestic carmakers — such as CATL and Stellantis — in order to retain some equity and ensure an integration of local and foreign talent. It is how China developed its own internal combustion engine (Ice) industry, signing JVs with Volkswagen in 1984, Stellantis in 1992, General Motors in 1997 and Toyota in 2000, among others. It is also not clear to what extent China is comfortable with spillovers in exchange for market access. One criticism is that Chinese FDI might focus on EV assembly, although data from consultancy Rhodium Group show not only China's FDI into battery plants but that this has provided anchoring for FDI upstream into cathode and anode plants in Hungary, Sweden and Finland. Asian firms tend to hire talent from their home countries for senior positions without "skills trickling down to the local population", according to clean energy researcher Transport & Environment. Chinese firms could continue to make batteries in China, withholding the expertise that eluded Northvolt, before shipping parts for assembly in Europe. One condition could require a portion of FDI allocated to R&D, involving universities or local think-tanks. "R&D activities are usually not typical features of (Chinese) investments in the V4 [Visegrad] region, as investors usually bring only assembly," economist Agnes Szunomar said in a report on Chinese investments into the V4 in January, although Volvo and Nio have made plans in eastern Europe, Szunomar added. As it has increased, Chinese FDI — both state and private — has also shifted almost entirely away from mergers and acquisitions towards ‘greenfield' investments ( see graph ), i.e. businesses from scratch, suggesting a growing skills imbalance between the regions. European policy must change Europe is not the only target for Chinese EV-related FDI, and might have to increase its incentives if it is to build out homegrown industry. In a "carrot and stick" approach, endorsed by InoBat chairman Andy Palmer, the efficacy of the EU's much-deliberated tariffs as a ‘stick' appears uncertain so far. Analysis from Rhodium Group suggests that the EU's tariffs have disproportionately penalised western-branded EVs made in China and sold in Europe. They have also been too weak to entirely force China's EV production into Europe and yet strong enough to raise investor uncertainty, which could include further hikes on EVs or new tariffs on battery materials, for instance, which would scupper China's plans for FDI in battery assembly. Out of 11 EV plants that China is reported to have considered, just three in Europe have been confirmed ( see graph ) — the lowest share globally of China's investments. Meanwhile, tax breaks, grants and interest-free loans might fulfil the ‘carrot' in the EU's approach, as Hungary has illustrated, with state support for multiple projects, ranging from €2.4mn to €900mn for CATL's $7.3bn battery plant announced in August 2022 — set to create 9,000 jobs — and consequently 61pc of Chinese FDI into Europe last year, according to analysis from Rhodium Group ( see graph ). By Chris Welch Europe gigafactory forecast 2030 GWh Overall Chinese FDI into Europe, by conduit $bn Status of Chinese EV plants by region since 2022 Newly announced Chinese EV-related FDI by host region $bn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Syrah declares Mozambique graphite plant force majeure

12/12/24

Syrah declares Mozambique graphite plant force majeure

Singapore, 12 December (Argus) — Sydney-based graphite producer Syrah Resources has declared a force majeure for its Balama operations in Mozambique and defaulted on US government-backed debt, given post-election civil unrest in Mozambique. This came as Syrah is unable to carry out production at Balama throughout October-December to replenish inventory and to sell to customers, because of a protest that had began at the site in late September, forcing a force majeure event. Syrah back in October said the protest is disrupting site access and causing production uncertainty. The firm is one of the few established non-Chinese graphite producers. The protest was originally linked to farmers with "historical farmland resettlement grievances", Syrah said. But it has persisted and worsened after Mozambique's general election in October, which triggered violent protests across the country's major cities given claims of electoral fraud. "The protest actions have been peaceful with no evident actions to deliberately damage property, plant or equipment at Balama," said Syrah. But efforts to reach a positive resolution have been "unsuccessful to date", it added. Syrah is still working on restoring operations "as quick as possible" but has acknowledged that any resolution will be a lengthy process. The Balama site has not been producing graphite since July, according to Syrah, owing to sufficient inventory for sales and low graphite fines demand. Balama produced around 24,000t of natural graphite during the April-June quarter. Syrah has been operating Balama in short "campaign" stints this year owing to insufficient market demand at times. The protest also triggered events of default on its loans with the US International Development Finance (DFC) and the US Department of Energy (DOE), given the "impacts and duration" of the protest. The US DFC pledged its first loan to a graphite operation to Syrah, which amounted to $150mn. Syrah also received a $102mn loan facility with US DOE for the expansion of its Syrah Vidalia anode active material facility in US. Syrah is engaging with US DFC and DOE on its defaults, it said.Australian mining company South32 earlier this month withdrew the production guidance for its Mozal Aluminium smelter in Mozambique because of riots and road blockages. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s domestic EV sales extend fall in November

06/12/24

Japan’s domestic EV sales extend fall in November

Tokyo, 6 December (Argus) — Japanese domestic sales of passenger electric vehicles (EVs) fell for a 13th straight month in November, mostly because of lower demand for domestic brand EVs. Sales totalled 5,041 units in November, down by 22pc from a year earlier, according to data from three industry groups — the Automobile Dealers Association, the Japan Light Motor Vehicle and Motorcycle Association and the Japan Automobile Importers Association (JAIA). Sales were up by 17pc on the month. EVs accounted for 1.5pc of Japan's total domestic car passenger sales in November, down by 0.4 percentage points from a year earlier. The fall in EV sales was mostly attributed to lower sales of Nissan's Sakura, one of the domestic producer's top selling EV models. Sakura sales fell sharply by 37pc on the year to 1,731 units. Sales of foreign brand passenger EVs were stable on the year at 2,184 units. Reduced deliveries from German manufacturer Volkswagen continued to weigh on supply , but new EV models from German producer BMW and Mercedes lifted demand for imported EVs, a representative from the JAIA told Argus . Foreign EV sales are likely to increase on the month in December, as the last month of the year typically records higher sales compared to other months, the JAIA representative added. Imported EVs accounted for 43pc of the country's total passenger EV sales in November. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

S Korea wary of battery risk from US-Canada tariff row

05/12/24

S Korea wary of battery risk from US-Canada tariff row

Singapore, 5 December (Argus) — South Korea's battery and mineral investments in Canada are expected to take a hit from US president-elect Donald Trump's proposed 25pc tariff on all Canadian imports, South Korea's trade and industry ministry Motie warned today. Trump's threat serves as a precedent for future global tariff measures from the US, according to Motie, citing its trade minister Cheong In-kyo, who held a roundtable on the tariff threat today. South Korean firms have been investing in Canada as it serves as a base to enter the North American electric vehicle (EV) and battery market, but companies that did so are expected to be "significantly affected" by the potential tariff, according to Motie. Any development in the tariff threat is being closely monitored to inform the South Korean government of potential future trade risks, according to Cheong, who added that South Korea will work closely with the Canadian government to "minimise" the "uncertainties" posed. Top South Korean battery maker LG Energy Solution (LGES) and South Korean battery materials producer Posco Future M — a subsidiary of conglomerate Posco — are some of the companies that have bet on Canada. LGES' joint venture with global automaker Stellantis, which is the first large-scale EV battery manufacturing facility in the country with a production capacity of 49.5GWh, began its battery module production in October, with cell manufacturing to commence in 2025. LGES in 2022 also signed agreements with Canadian firms Electra, Avalon and Snow Lake for lithium hydroxide and cobalt supply. Electra's agreement was later expanded and is supposed to supply LGES 19,000 t/yr of "battery-grade cobalt" for five years starting from 2025, according to Electra. Electra secured a $20mn prepayment facility in September to help plug a $60mn gap in capital that it needs to finish its $250mn refinery in Ontario. But Posco Future M earlier this year, citing "local conditions", delayed the completion of its 30,000 t/yr high-nickel cathode active material plant in Quebec, which is a joint venture with US automaker General Motors. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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