One Planet, Two Competing Battery Supply Chains
Polestar, Our Next Energy, BYD, Q4 e-tron, Foxconn, NIO, Rivian
The Big 5 This Week
1. One Planet, Two Supply Chains. This past weekend I joined 23 experts at UC San Diego to look at what happens when Made in China 2025 collides with America's Inflation Reduction Act.
Major takeaway: Get ready for a future with two parallel and competing supply chains for batteries, chips and AI. Security has abruptly become a bigger priority than efficiency.
2. Our Next Energy / Michigan. Highly-regarded battery startup Our Next Energy (ONE) will invest $1.6 billion to build a battery cell plant in Michigan in 2024. The plant will have capacity to supply 200,000 vehicles per year. Link
3. Giant BYD-Sixt Car Rental Deal. BYD will deliver up to 100,000 cars to Sixt between now and 2028. One way a newcomer can build brand awareness quickly is to get customers' derrieres into BYD seats. Will the BYD Atto 3 deliver range and charging enough to satisfy European rental car customers? Link
4. Toyota Zigs While Everyone Else Zags On EVs. Yet Still No.1. Toyota sold 5.1 million vehicles in 1H 2022, more than a million ahead of second place Volkswagen. Toyota is way out in front in profits, too. The Japanese colossus earned $19 billion dollars last year. Why is Toyota slow to jump on the EV train? Link
5. Foxconn Gets Real in Ohio. After several false starts on US soil Foxconn is now building the Endurance electric truck in Lordstown, Ohio. In 2023, Foxconn could start manufacturing Fisker SUVs, too. Link
What I'm Driving: I drove the Q4 e-tron last week in Oceanside, California. It was smooth, quiet and quick enough. And remarkably affordable, with prices starting at $48,000. But the infotainment system is not yet where it should be. Still feels more mechanical than intuitive. Link
Recommend to Read: Overreach: How China Derailed Its Peaceful Rise. Highly-respected China expert and author Susan Shirk gives readers the tough news right up front: "A new Cold War has already begun. it is being waged in economic, technological, political and informational spheres. How did things end up in this way?"
Future Cars & Markets
Electrics
Polestar 3 October Reveal. The Swedish-designed, Chinese-owned Polestar will reveal the Polestar 3 SUV on October 12, 2022. Deliveries will follow in early 2023. Prices are expected to start at $75,000, with range in the high 300 miles. Link
BYD exploded through 200K deliveries in September, an all-time high. Half are BEVs, half are PHEVs. BYD also exported 8,000 vehicles last month. Link
Young EV Companies Sink (Deeper) Into Red. There is a tendency to associate young EV companies with growth and potential. But don't forget about the losses. With recession looming, the prediction is more pain. Employees at EV startups are starting to weary from the battle. Link
Losses in Q2 2022
Rivian - $1.7B
Polestar: - $502M
NIO - $410M
Xpeng -$403M
Lucid - $220M
Fisker -$106M
Batteries / Supply Chains
Global Battery Rankings: Of the 6 largest battery makers globally, three are Korean, two are Chinese and 1 is Japanese. The next six are all Chinese.
1. CATL: 69 GWh
2. LG: 28
3. BYD: 24
4. Panasonic: 20
5. SK On: 14
6. Samsung: 10
Source: Tommy Fang, UCSD and SNE Research.
Britishvolt Backslide. The vision was to build a $3 billion British gigfactory capable of supplying state-of-the-art art batteries for 300,000 cars a year. Now Britishvolt is in disarray, beset by a massive cash crunch and a loss of investor confidence. What are the lessons for other battery startups in the US and Europe? Link
Gotion Into Michigan? Local officials in Western Michigan have approved a generous package of incentives to attract a $2.4 billion dollar investment from Gotion. China's No. 4 battery company is not confirming nor denying the deal. Other Chinese battery companies like CATL and BYD are watching this "test case" very closely. Link
Recyclers/IRA Legislative Boost. Companies like Li-Cycle and Redwood Materials welcome the Inflation Reduction Act because it promises to scale up business more quickly. "Building localized supply chains of critical battery grade materials to support EV production has been a key part of Li Cycle's vision since inception in 2016. We view the IRA as a further accelerant," Li-Cycle executives told me recently. More evidence that "one planet, two supply chains" is the new reality. Link
Autonomous Tech
Mobileye IPO. Purchased by Intel in 2017 for $17 billion, Mobileye expects to IPO at a value of around $30 billion. Imagine buying something and making $13 billion on it in less than 5 years. Link
Tesla FSD Option Going Global. Elon Musk this week revealed plans to make FSD available to several markets outside of the United States before the end of 2022. Link
New Numbers / Milestones
1. China EV Output Dwarfs All The Rest. China will produce and buy more EVs than all other countries combined in 2022. One reason: The average Chinese EV sticker price is under $30,000, and some go as low as $5,000. Most EVs sold in America and Europe are north of $50,000. Link
Global EV* Forecast 2022
China: 6M
Europe: 2.4M
USA: 1M
RoW: 220K
*Both BEVs and PHEVs. Sources: Schmidt Research, ZoZoGo, EVAdoption.
2. Geely / Aston Martin. Geely founder, billionaire Li Shufu, says that in times a time of great tumult (that would be today) one should form multiple vertical and horizontal relationships. Li took a minority position in Aston Martin this week. Link
Geely's Vast European Portfolio
Aston Martin
London Taxi Company
Lotus
Mercedes
Polestar
Proton
Smart
Volvo
3. Top five plug-in EV brands globally in 2022 YTD August.
1. BYD: 974K
2. Tesla: 718K
3. VW: 478K
4. SAIC: 458K
5. Geely-Volvo: 328K
One German, One American and Three Chinese. Link
4. Michigan football is 5-0 and ranked 4th in the nation. Indiana is up next. The first real test in 2 weeks against unbeaten Penn State. But Indiana can be a feisty foe. Link
Volt Rush: Winners and Losers in the Race to Go Green
“I am surprised by the speed with which the West is making moves to catch up with China in batteries.”
Guest: Henry Sanderson, Author & Chine Veteran
The ZoZo Go Newsletter: Future. Electrics. Global.
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