Electrics Are Turning Japanese (In America)
Toyota, Honda, BYD, Britishvolt, NIO, Luna Lithium
The Big 5 This Week
1. Electrics Are Turning Japanese. The pugilistic narrative for years has been Japanese hybrids and hydrogen in this corner versus Chinese electrics in that corner. Forever. Now, Japanese automakers are swinging hard for electrics. Toyota this week announced a massive new investment in battery operations in North Carolina, one day after Honda's own battery letter of intent for Indiana. Link
2. Britishvolt / Giga Reality Check. Britishvolt is postponing its Giga battery plant SOP from the originally planned date of 2023 to the middle of 2025. This news comes just one week after Britishvolt's CEO resigned. Link
3. BYD / Berkshire's Puzzling Move. Berkshire sold more than 1 million shares of BYD in the same week that the company announced record sales and profits. Buffett's firm is not the first to trim holdings in Chinese superstar companies. Link
4. NIO / Decisive Moment in Europe. NIO is facing a must-win situation in Europe with the coming launch of its flagship ET7 and little brother ET5 in Europe. Growth at home has slowed, the stock is down 41% YTD and the company continues to lose money. Link
5. Lithium / Spectacular Jump. Lithium prices are exploding - up almost 900% since 2020 - driven by a barrage of "white gold"-hungry battery plants. Benchmark Minerals Intelligence gives an expert look at the demand drivers - and supply constraints. Link
For more on lithium, meet Emily Hersh, CEO, Luna Lithium. Emily is our guest this week on the Driving With Dunne podcast. Emily is wicked smart and very enjoyable to listen to.
What I'm Driving: This week I will drive a vehicle powered by a good old-fashioned (!) gasoline engine, the 2022 Lincoln Aviator. The first all-electric (Star Concept) Aviators will come to market in 2024. And they will look quite different. Link
Recommend to Read: The Rise and Precarious Reign of China's Battery King. Get to know Zeng Yuchun, the leader of CATL, the largest and arguably most powerful battery maker on the planet. "They're pretty much dictating the terms."
Future Cars & Markets
Electrics
BYD's Explosive Move Up. BYD is climbing fast. Quite stunning, the growth, while other stall or go into reverse. Link
China Market Leaders 1H 2022
Sales and YoY Growth Rate
1. VW 960K (-11%)
2. Toyota 830K (0%)
3. Honda 660K (-16%)
4. BYD 650K (+163%)
5. Changan 580K (-12%)
Autonomous
Nvidia / China Chip Crunch. Nvidia's revenues from China - almost $2 billion per year - might be severely diminished by advanced chip sale restrictions imposed by the Biden administration. Potentially massive impact on smart EV players like NIO and Xpeng. Link
Policies / Geopolitics
IRA Legislation: Full Spectrum of Emotions. In my recent conversations with miners, refiners, battery companies, automakers and recyclers, here is a distillation of global sentiment toward Biden's IRA legislation by country of origin:
American: 100%. Yaay.
Korean: Short-term outrage.
Japanese: Controlled consternation.
Chinese: Chilly. Winter is coming.
Europeans: On holiday, check back in September.
Honda / Supply Chain Decoupling. "The review of the supply chains from China and risk hedging are elements that need to be considered." Link
New Numbers / Milestones
GM's Ultium JV makes first battery cells in Ohio. Link
China's Tianqi Lithium profits increase 119% in 1H 2022 to $2 billion. Link
NIO is not expected to generate positive earnings until 2024. Link
Xpeng lost $650 million in 1H 2022. Link
Almost everyone wants faster permits for critical minerals. Local officials shrug and say: What about the lawsuits? Link
Michigan football 2022 season opener at the Big House. See you there on Saturday. McNamara or JJ your guy? Coach Jim Harbaugh says it's in the Bible. Link
The ZoZo Go Newsletter: Future. Electrics. Global.
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