Summary of Tiger Live
- Global Carbon Emission Goals
- Car Companies' Determination of Green Transformation
- Global Sales Ranking of Electric Vehicles
- Reasons Surpports the Battery Metal Industry Booming
- Main Metal Elements of Batteries: Lithium, Cobalt, Nickel, Graphite
- Demind and Price Change of Lithium, Cobalt, Nickel, Graphite
- China is the Biggest Buyer
1.Global Carbon Emission Goals
Many countries, including China, have committed to this carbon neutrality by 2060. The details are as below:
And to achieve carbon neutrality needs many specific measures. Among many of theose measures, stop using fuel vehicles became the consensus.
With the development of the EV industry development since 2005, many countries have announced and promoted the policy of banning the sale of fuel vehicles.
European countries were the main power announced it will stop the use of fuel vehicles. In addition, the United States said that by 2030, more than half of novice sales will be carbon-free electric vehicles; Japan announced that by mid-2030, electric vehicles will be used to bring new powered gasoline vehicles. South Korea said by 2035-2040 it would only allow the sale of alternative-emission cars and hybrids.
2. Car Companies's Determination of Green Transformation
We have seen that many car companies have embarked on the transformation road of green development, and electrification has become the main direction of the transformation and development of the global automotive industry. $Ford(F)$, $Volkswagen AG(VWAGY)$ ,$Mercedes Benz Group AG(DDAIF)$ ,$BYD Co., Ltd.(BYDDY)$ ,$BYD COMPANY(01211)$ ,$Honda Motor Co., Ltd.(HNDAF)$ ,$Honda(HMC)$ .
3.Global Sales Ranking of Electric Vehicles
In recent years, among main countries, China's sales volume and growth rate are at the forefront.
China started relatively early in the field of new energy vehicles, and the government's policies are also very clear, including the construction of charging stations, swap stations, public charging piles, private charging piles, etc., which is very convenient. In addition, there are also corresponding insurance services to escort.
So far, the sales of new energy vehicles in China are very good, and the government has felt that subsidies are not needed, and will stop the subsidy policy on December 31, 2022.
In recent years, China's new energy production and sales targets may have been exceeded, and Chinese consumers are also actively rushing to buy these cars before the last train of subsidies.
For the future sales of China's electric vehicle market, data from the China Automobile Association shows that the growth rates in 2023, 2024, and 2035 will be 11.7%, 15.3%, and 20%, respectively.
4. Reasons Surpports the Battery Metal Industry Booming
Based on the safety considerations of oil dependence and the orientation of industrial policies, with the soaring fuel prices, people's acceptance of new energy vehicles is increasing.
The new energy vehicle market is developing rapidly and maturely. The development of automobile output value has also led to cross-border investment in other fields.
In the context of global efforts to alleviate climate warming and the increase in demand for clean energy, countries are actively saving energy and reducing emissions, improving the construction of power reserve facilities, and adding the more environmentally friendly attributes of new energy, the battery metal industry is in a stage of vigorous development.
In addition, the recent surge in energy prices caused by the Russian-Ukrainian war is actually a very important reason why people choose to use this electric vehicle.
The current applications of lithium batteries are mainly distributed in Passenger EVs, Consumer Electronics, Electric 2W/3W, E-Buses, Commercial Evs, and Stationary Storage, especially for passenger cars, the proportion of lithium batteries is close to 2/3.
5. Main Metal Elements of Batteries: Lithium, Cobalt, Nickel, Graphite
Battery metal elements can be mainly classified as lithium, iron, cobalt, nickel, copper, aluminum. There is an article on the mining.com in early 2021 that is worth studying about the needs for production.
It assumes that Tesla will produce 20 million electric vehicles in 2030, then shows the relative demand for metal materials compare to 2021's production capacity.
According to the table below, demand for lithium is equivalent to 142% of capacity needs in 2021, and capacity needs for graphite are 113%. While nickel, cobait and's demand are 25% and 36% respectively.
6. Lithium, Cobalt, Nickel and Graphite Reserves and Demand
In terms of the distribution of raw materials, Australia's reserves may account for 1/4 of the world's known reserves, but the production capacity is only more than half, which means that AU is accelerating the consumption of its own reserves.
The graphite on the far right is 80% of the production capacity from China, and the reserves account for 1/5 of the world.
The largest reserves of cobalt are in Congo, so the production capacity is almost 70%.
The figure below reflects the consumption of lithium, cobalt and nickel, the scarcer energy among the three battery metals, over the past few years.
source：Metso Outotec
We can see a jump in demand for all three energy resources in 2021.
In fact, it has been a situation of short supply since 2020 years, and according to the current forecast of electric vehicle sales, the situation of short supply will be a long-term continuous situation.
Electric vehicle batteries are currently the main driver of lithium demand, with cobalt and nickel rapidly rising in importance.
7. Lithium, Cobalt, Nickel Price Surge
The following picture shows the price fluctuation curve of lithium cobalt nickel since 2015,through these price fluctuations, this can reflect a market that is in short supply.
source：https://www.mdpi.com
8. China is the Biggest Buyer
Referring to the chart below, EV sales growth accelerating in major regions (Europe, US, China) in 2021. Among these countries, the highest demand for electric vehicles is in the Chinese market.
The main reason is that on the one hand, China's policy, on the other hand, the consumption awareness of Chinese consumers is also relatively advanced.
Because the midstream and downstream enterprises in lithium battery production are basically in China, China has the largest demand for the above-mentioned lithium battery metal raw materials, and China is the main consumer of lithium battery raw materials.
From upstream battery cathode materials, anode materials to downstream battery production, and even individual production of electric vehicles, China is the largest buyer of these front-end materials. While the big price fluctuation is lithium, it is because the main lithium resources is controlled by this mining company in the west countries.
Next article, we will share more details, and list companies and cases on how to screen out good mining companies.
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