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Global Battery Lithium Basket

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Global Battery Lithium Basket

Lithium battery is the only suitable battery for portable equipment from wireless communications, mobile computing and electric cars. This battery has a low weight, high energy density and a long lifetime. It is expected that the use of lithium battery will increase alongside the electric car industry. The market is still relatively small but with more people concerned about climate changes, it has a big room for development. The electric cars industry is expected to increase its market share worldwide, especially in China and Europe. Apart from the California exception, the US market is not ready yet for the electric car shift.

China is the world leader of the electric car industry. In 2018 electric car sales increased by 62%[1] (1.3 million units sold). Electric car manufacturers yearn to possess market shares of this part of the world but it is difficult for them to enter the Chinese market. The trade war between the US and China does not make things easier for no Chinese car companies. Despite the high expectation, electric car sales in Europe were low in 2018. The only country that outperformed was Norway with 60% of new car sales for electric cars. In 2019, European Union leaders agreed on a plan to cut CO2 pollution from new cars by a third by 2030 and to introduce incentives for people that buy electric vehicles. This new anti-pollution standards will took effect on January 1st 2020. The car industry is waiting for the implementation of the new standards and retains the electric car offer in the old continent.

 

The anticipation of the huge increase in electro-mobility production, the slowing growth in China and the opening of lithium mineral operations in Australia made an oversupply in the market. Within the Global Battery Lithium Basket it can be observed, that all the companies that are lithium battery producer did a poor performance due to their strong correlation with electric vehicle market, macroeconomic events (China vs US trade war and China growth) and the oversupply situation.

 

[1] Source: https://www.cnbc.com/2019/04/08/fitch-says-chinese-electric-vehicle-sales-to-boom-despite-subsidy-cuts.html