AGORACOM Small-cap Investor Relations Blog

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

The world’s biggest carmaker announced Friday that it had struck a deal with Sweden’s Northvolt to build a giant battery factory in Germany. It also confirmed production dates for two new models key to the group’s success.
A. Paul Gill, CEO of Lomiko Metals (TSXV: LMR, OTCQB: LMRMF) noted that the graphite supply from China to Europe and North America has dropped tremendously over the past few years. This market change may be an opportunity for the Company as European and North American battery manufacturers are now looking for stable suppliers. “If we’re going to continue to expand the electric vehicle industry in Europe and  North America, we’re need a secure supply of raw materials.”,stated Gill. “The shortage of graphite is going to be a real concern in the coming years.”,he added.
The German company said production of lithium-ion batteries would begin in late 2023 or early 2024, a move that will be vital to Volkswagen’s (VLKAF) ability to mount what it calls “the largest electric offensive in the automotive industry worldwide.”
The group plans to launch almost 70 new electric models in the next decade, and hopes to build 22 million electric cars over this period. It is investing more than €30 billion ($33 billion) into electrifying its fleet over the next four years, prompted in part by pressure from regulators and the fallout from its diesel emissions scandal.
If successful, Volkswagen could overtake rivals such as Tesla (TSLA) and Warren-Buffet-backed BYD in China.

Battery factory big win for Europe

Lithium-ion batteries, the majority of which are currently produced in China, are a critical part of Volkswagen’s electrification strategy. Batteries account for about a third of the cost of electric cars, according to consulting firm Wood Mackenzie.
China is home to 70% of global lithium cell manufacturing capacity, with the United States in second place at 12%, said Simone Tagliapietra, a climate and energy fellow at Bruegel, the European economic think tank. Europe lags behind and hosts only about 3% of global production capacity, according to the European Commission.
The Volkswagen-Northvolt deal represents a “very significant investment for the future of European battery production,” Tagliapietra told CNN Business.
Volkswagen is investing €900 million ($993 million) into the Northvolt joint venture. Some of the money will go into the German factory, the rest will secure Volkswagen a 20% stake in Northvolt and a seat on its supervisory board.
Volkswagen also confirmed that production of the new ID.3 electric car series would begin this November, with the first models delivered to customers next year. It has already sold out a limited edition of the ID.3, which is due to make its world debut on September 9 at the Frankfurt Motor Show.
Also premiering at the show will be an electric version of the vintage Volkswagen Beetle. The conversion of the Beetle is being done by a specialist partner company, eClassics, and will use of components from the new VW e-up! city car. Porsche, one of Volkswagen’s premium brands, confirmed on Friday that it would start producing its first all-electric sports car — the Taycan — on September 9.

A New Production Plant

Alongside investing in battery production, Volkswagen is pouring €1.2 billion into overhauling its Zwickau vehicle plant, which formerly produced internal combustion engines, so that it can make electric cars. This process began in 2018 and is expected to be completed by 2020. By 2021, the plant is expected to produce 330,000 vehicles per year, making it Europe’s “largest and most efficient electric vehicle plant,” according to Volkswagen.
The ID.3 will be the first vehicle to be built on this new modular electric car production platform, or MEB. In the next three years, production of 33 models across the group’s brands is due to start on the MEB. 

SPONSOR: Lomiko Metals LMR:TSX-V – A Canadian exploration-stage company discovered high-grade graphite at its La Loutre Property in Quebec and is working toward a Pre-Economic Assessment (PEA) that will increase its current indicated resource of 4.1 Mt of 6.5% Cg to over 10 Mt of 10%+ Cg through a 21 hole program at the Refractory Zone. Click Here For More Information

• Porsche will be investing over US$6 billion in battery power over the next few years
• Markedly superior to the Tesla Model S it competes with.

It just debuted two days ago, but Porsche has already taken some 30,000 deposits for its new Taycan. Not exactly Tesla numbers, but impressive nonetheless. Closer to home, more than 1,000 Canadians have plunked down $2,500 hoping to secure one of the first electrified Porsche four-doors to hit the street. Again, neither number rivals the multitudes that offered up deposits on Tesla’s Model 3, but Taycan does play in an entirely different snack bracket.

A more appropriate context, then, might be to note that said deposits are roughly equal to the number of 911s that Porsche Canada sells in its best of years. In other words, September 4’s worldwide launch of the Taycan was a very good day at the office for Porsche Canada’s president and CEO, Marc Ouayoun.

Now, never mind that a few of those chomping at the bit may well be put off by the Taycan’s price — the base Turbo starts at $173,900 and the Turbo S is a wallet-stretching $213,900. If that means Porsche has finally brought profitability to the electric vehicle segment, so much the better.

More important is that the company is depending on the Taycan to be successful, Detlev von Platen, Porsche’s executive board member for sales and marketing, telling the launch event attendees the company will be investing over US$6 billion in battery power over the next few years and expects more than 50 per cent of the company’s cars to be electrified within the next decade. In other words, Porsche needs the Taycan to be successful.

And more important than that is that the automotive industry needs the Taycan to be successful. So far, the electric vehicle segment has been all Tesla, the Silicon Valley upstart the only truly successful purveyor of battery power. Yes, I know Nissan’s Leaf remains the best-selling EV of all time, but, while semi-plentiful, it’s actually selling well below – barely 10 percent of initial projections – what was predicted when it was introduced ten years ago.

Tesla, meanwhile, has become the poster child for planet-friendly motoring, Elon Musk’s decision – whether it was brilliant insight or bulls%^t luck really doesn’t matter – to focus on the luxury segment proving to be providential. Whither goes Tesla, it now seems, goes the entire electric vehicle industry.

The problem is that Mr. Musk’s influence – and the cult-like devotion it has engendered – is not good for anyone except Tesla shareholders.

Whether you’re a fan of long-range plug-ins or prefer fuel cells, it is not so much that Tesla is winning, but that Mr. Musk so dominates the conversation surrounding EVs that it stifles discussion into what a truly multi-platform zero-emissions future might look like.

Now, to be certain, the company and man – for they are one and the same – deserve all the accolades they have received for a) creating the luxury EV segment where none existed and b) legitimizing the concept of the battery-powered car in the eyes of a formerly skeptical audience. For that, Mr. Musk will undoubtedly be lauded in history books as the founder of a movement.

The problem is that said worship has gone too far, creating disciples for whom any dissent, any mention of competitive brands is seen as traitorous. In my 35 years in this biz, I have see nothing – not the Ford-versus-Chevy wars, not Jeep Wrangler aficionados, not even “one-per-centers” devoted to their Hogs – to match the cult-like allegiance Tesla enjoys amongst its minions.

Unfortunately, that deference is stifling competition. Despite the deception that traditional automakers are dragging their heels on electrification, nothing could be further from the truth. The problem they all face is that, any time they introduce a (costly-to-develop) EV, they are met with the mildest of “mehs.”

Initially, they were decried as too ugly (Chevy’s Bolt), too slow (the Kia Soul) or lacking in panache (pretty much everyone). But, then Jaguar came out with the I-Pace, offering both pedigree and panache. Yet they too were greeted with another giant yawn. Too slow, said the disciples, ignoring the fact there’s more to a sporty automobile than Ludicrous acceleration. So I-Pace sales have crashed. Audi’s e-tron? Better, but hardly all-conquering, especially considering that the Model X with which it competes is the weakest model in Tesla’s lineup.

And that’s why the Taycan is so important. It meets every single objection even the most devoted of Teslarati could dream up. Brand image? None is stronger than Porsche’s. Build quality? Ditto. Beauty? The Taycan is the four-door 911 that Porsche always promised the Panamera would be. Ludicrously fast? My Lord, yes. Toss in handling that is all but a match for the best of supercars and you have a car that is markedly superior to the Tesla Model S it ostensibly competes with.

Oh, the haters will no doubt point to its price as an objection, but the fact remains that, if the Taycan fails to become a genuine Tesla rival – if not in sales then at least in influence – then we really may have to come to grips with the possibility that what we have been projecting as an electrified future is really just cult worship writ especially large.