More motion, less e-motion: Is 2014 the year lithium regains its traction?

Transcription

1 More motion, less e-motion: Is 2014 the year lithium regains its traction? David Merriman Senior Analyst 6 th Lithium Supply & Markets Conference 2014, Montreal

2 Disclaimer The statements in this presentation represent the considered views of Roskill Information Services Ltd. It includes certain statements that may be deemed "forward-looking statements". All statements in this presentation, other than statements of historical facts, that address future market developments, government actions and events, are forward-looking statements. Although Roskill Information Services Ltd. believes the outcomes expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include changes in general economic, market or business conditions. While Roskill Information Services Ltd. has made every reasonable effort to ensure the veracity of the information presented it cannot expressly guarantee the accuracy and reliability of the estimates, forecasts and conclusions contained herein. Accordingly, the statements in the presentation should be used for general guidance only.

3 Overview Setting the picture State of the market in 2013/14 Plug-in (EV & PHEV) Full hybrid (HEV) Tesla s gigafactory Deviation to 48V/micro/mild hybrid & 2-wheelers Inflection point and market forecast Conclusions

4 Setting the picture

5 Transport applications consumed 3% of lithium demand in 2013, approximately 5,000t LCE World: Consumption of lithium by end-use, 2013p 3C 79% Power & motive 10% Primary battery 2% Air treatment 5% Polymer 5% Metallurgical powders 6% Aluminium 1% Other 9% Rechargeable battery 29% Transport 10% Heavy duty 1% Glass 9% Greases 8% Glass-ceramics 12% Ceramics 14%

6 State of the EV market

7 E-car sales (000 units) % E-car in global sales E-car sales have increased since 2011, especially HEVs, and reached 2% of global auto sales in ,800 Electrified vehicle sales by type, % 1,600 1, % 1,200 1, % % % e HEV (NiMH) HEV (Li-ion) PHEV EV % E-car 0.0% Source: Roskill estimates based on a number of individual sources

8 It should be remembered that car sales are not indicative of battery requirements Electrified vehicle sales, by type, 2013 Electrified vehicle sales, by battery capacity, 2013 EV = 94,000 (5.5%) PHEV = 112,000 (6.5%) HEV (Liion) = 220,000 (13%) HEV (NiMH), 1,664MWh (27%) EV (Li-ion) = 2,680MWh (43%) HEV (Li-ion) = 308MWh (5%) HEV (NiMH), 1,280,000 (75%) PHEV (Liion) = 1,500MWh (24%) Source: Roskill estimates based on a number of individual sources

9 EV & PHEV ( Plug-in vehicles )

10 The Nissan Leaf was the best selling plug-in of 2013, with sales almost double that of its competitors Plug-in car sales by model, 2013 (no. units) Source: Zachary Shahan, ABB Insights

11 Sales of plug-in e-cars to date appear to be more successful than HEVs at corresponding times in their life cycle Comparison of Prius sales versus plug-ins since launch to end-2012 (no. units) Source: IEA (data to end 2012)

12 Lux Research estimates output of EV/PHEV batteries reached 0.92GWh in Q Plug-in battery sales, by manufacturer, (MWh) Panasonic s market share has accelerated with Tesla s success, accounting for 39% of sales in 2013 NEC, supplying the Nissan-Renault alliance was previously the market leader and had a 27% share in 2013 LG Chem, supplying Chevrolet, was third at 9% Source: Lux Research

13 The automotive lithium-ion battery value chain is relatively concentrated, which is typical of the auto industry in general Lithium Cathode Battery OEM? Source: Roskill, Avicenne

14 Plug-in market: What to watch in ) Success of newly launched BMW i3 & Mercedes B-class EV, and forthcoming BMW i8 PHEV: BMW has already increased output by 43% and committed to increase carbon-fiber production for its I models by 200% New EV models (Leaf, Volt, Model S) seem to have fared better than retro-fit (Tesla Roadster, VW E-range, Ford Focus EV) Not so true for PHEV, with adapted cars selling well (Ford C-max, Volvo V60) 2) China s policy on transport and reducing air pollution Incentives of US$9,800 subsidy for EV purchases Lagging behind 5 million target by 2020 (27,800 sold by end-2013) Sales of BYD s Qin (6,000 orders in the first few weeks of 2014) 3) Other government support/subsidies for electric vehicles 4) Tesla gigafactory plans and launch of Model X (already delayed to 2015) Source: Trade press, Tesla announcements

15 HEVs

16 Toyota s loyalty to NiMH means HEVs continue to lag plug-ins in lithium-ion battery use US hybrid sales by manufacturer, 2013 Hyundai 4% Honda (incl. Acura) 4% Kia 3% VW (incl. Audi/Porsche) 1% Other 1% GMC (incl. Cadillac, Buick, Chevrolet) 5% Ford (incl. Lincoln) 15% Toyota (incl. Lexus) 67% Source: Company websites

17 Tesla gigafactory

18 Tesla s gigafactory announcement jolted the lithium sector into life, but the lift was temporary Tesla Announcement Source: Yahoo Finance

19 Tesla s announced plans to construct a lithium-ion gigafactory in Q What we know The US$5Bn facility will be located in either Arizona, Nevada, New Mexico or Texas, or California Output will be used for Tesla s vehicle line-up, including the proposed Model C (a targeted US$35,000 sticker-price) The factory will also supply Musk s other company, SolarCity, and similar companies, with off-grid storage batteries. By 2020, the facility would produce more lithium-ion batteries than total global output in 2013 Aim is to reduce lithium-ion unit costs by 30% Panasonic (Tesla s existing battery supplier) has signed a LOI to become a partner in the project Source: Trade press, Tesla announcements

20 The gigafactory idea is still short on specifics, however, leaving questions over its viability What we don t know Who will finance the US$5Bn in CAPEX (Tesla committing US$2Bn) Will it be based on Tesla s current Panasonic lithium-ion technology, next-generation technology, or be flexible enough to change/switch Where will other partners come from (Tesla has previously courted Samsung, but would they work in a JV with Panasonic) Could the US Government support the venture through a new American Recovery and Reinvestment Act loan program given limited success (Tesla) and notable failures (Solyndra) Many other government-supported EV programs, including loans for battery plants, have yet to realize their potential Source: Trade press, Tesla announcements

21 The impact of the Tesla gigafactory would be very pronounced on the global battery industry and its raw material requirements 120, ,000 80,000 60,000 40,000 20,000 0 Battery (MWh) Lithium Cobalt Nickel Graphite 2013e 2018f Tesla Source: Navigant Research

22 Micro, mild and start-stop HEV and 2-wheelers

23 48V lithium-ion systems for start-stop, micro and mild systems could increase strongly, but lithium use per unit is small ( kg LCE) Forecast 48V sales by region (no. units), Source: Navigant Research

24 E-scooters account for around 30% of total scooter and motorcycle sales, the highest e-drive penetration of any transportation sector ~4.1M e-scooters sold in 2013; <1% outside Asia-Pacific and ~80% in China Two main categories: 50cc equivalent = 3kW motor and 2kWh battery (50m range, 30mph top speed) 125cc equivalent = 7kW motor and 3-4kWh battery (50m range, 50mph top speed) Market forecast to grow slowly as Asia-Pacific market is mature Lead-acid dominates, because price competitive with gas-based models in Asia-Pacific; Li-ion penetration estimated at 5-7%, Clamp-down on lead-acid producers in China in 2011 only succeeded in concentrating production, rather than prompting a switch to Li-ion Source: Navigant Research; Cleanrider.com

25 Predicting the inflection point

26 Trends suggest the transport market has entered a period of steady growth, but inflection won t come until costs fall 90,000 Forecast E-car sales by type, by battery capacity (MWh) 80,000 70,000 60,000 50,000 40,000 30,000 Interest grows, benefits acknowledged = Increased growth Infrastructure improves, Technology improves Costs fall = Mass market adoption 20,000 10,000 Early adopters = Steady growth 0 HEV (NiMH) HEV (Li-ion) PHEV (Li-ion) EV (Li-ion) Other (Li-ion) High case Low case Source: Roskill estimates Note: PHEV includes extended range EV (e.g. BMW i3 with back-up motor); other = buses, delivery vehicles bigger than LCV size

27 Lithium demand growth sees wide variances because of uncertainty over electric vehicle output going forward 600,000 Forecast lithium demand, (t LCE) 500, , , , , Non-transport uses Transport uses High case Low case Source: Roskill estimates

28 Conclusions Is 2014 the year lithium regains its traction In terms of PR yes, Tesla s gigafactory has seen to that In terms of demand growth sort of, electrified vehicle sales growth is expected to continue but the impact will be minimal to the overall market The lithium industry must continue to wait patiently for the inflection point. But, the inflection point is not going to magically appear, it is going to have to be created A number of factors will influence it, but most importantly electric-only range must increase and costs must decrease To this end, Tesla s gigafactory plan may actually create the inflection point and should be closely watched

29 And don t forget about technology though Possible alternative battery technology for electric vehicles

30 Roskill Research & Consulting Consulting: Market assessments Feasibility studies Industry analyses Acquisition studies Strategic planning Competitive evaluation studies Commercial intelligence Due diligence Contact: David Merriman Relevant reports: Steel alloys: Nickel Manganese Minor metals: Lithium Cobalt Industrial Minerals: Graphite Fluorspar

31 Thank you for your attention!

32 Appendix A: Plug-in sales data for 2013