Electric Vehicle Markets & Future Breakthroughs in E-Mobility Trends

The Paris Auto Show was held in October 2022.

French President Emmanuel Macron attended the event, speaking with CEOs from Renault Group, Stellantis and others, about the developments in he Electric Vehicles (EV) market. One of the other standout moments of the 2022 Paris Auto Show was how Chinese EVs stole the show. Watch this video segment of the event about BYD’s latest EV for the European market.

Significantly, during the time of the Paris Auto Show, there was a deal made by a French lithium miner, Imerys, to develop a new mine located in Beauvoir, France. This mining project aims to make France one of the European Union’s (EU) top lithium suppliers under the backdrop of increasingly higher demand for EU domestic production of EVs.

The significance of this announcement comes during a time of higher geopolitical tensions with China and Russia over global commodities, raw materials supply chains and the effects from sanctions on industrial policies during the conflict in Ukraine.

On 24 October 2022, an announcement was made by the CEO of Imerys, Alessandro Dazza, to officially launch the “Exploitation de Mica LIthinifère par Imerys” (EMILI) which is a project concering the production standards for the Beauvoir lithium mine. According to the press release, the company intends to mine 34,000 tonnes of lithium hydroxide per year, until 2028, of which the production target of around 700,000 EVs per year would be possible.

According to Imerys CEO Alessandro Dazza, sustainable production at the Beavoir mine is key to the project’s success. For instance, he declared during the EMILI launch session that: “Forts de notre expertise en matière d’extraction et de transformation des minéraux, de notre excellence opérationnelle, et de notre capacité à le faire de manière responsable et durable, nous développerons ici, à Beauvoir, un des plus principaux projets européens de valorisation du lithium”.

This is my own translation of the above statement from CEO Alessandro Dazza in English: In light of our in-depth expertise in minerals extraction and minerals processing; operations effectiveness; and our capacity to work in a responsbile and sustainble way, the company will develop here at Beauvoir, one of the main European projects for the recovery of lithium.

Reuters reported on the day of the announcement that the French government already has plans to make mining of lithium and other critical metals an important part of the country’s strategy to develop its economy, such as the recycling scheme put forth by another French mining company called Eramet, with mining projects in Argentina, that is supposed to receive funds of 100 million euros.

The French news agency Sud Ouest reported that the EMILI project at the Beauvoir mine was critical for decreasing dependence on China’s lithium suppliers for the European EV marketplace. While also benefiting French domestically by providing up to 1,000 new jobs in the Auvergne-Rhône-Alpes areas of France.

On 28 October 2022, the European Union’s (EU) European Council and European Parliament passed an agreement to cut down on the sale of new diesel and gasoline vehicles by 2035, as part of the “zero-emission road mobility by 2035” plan. The plan seeks to cut CO2 emissions from new diesel and gasoline vehicles by 100% compared with 2021 levels. This would effectively put a ban on new production and sales of diesel and gasoline vehicles that would reach such levels of CO2 emissions.

There are other regulations and exemptions in place to protect smaller automakers in the EU, though the agreement signaled a big win for large campaigning groups, such as Brussels-based Transport & Environment, who have been working toward a nations-wide ban on fossil-fuel vehicles in the EU.

According to Euronews, the deal to phase out diesel and gasoline vehicles by 2035 was made under the Fit for 55 framework to reduce green house gas (GHG) emissions by 55% by 2030.

After the deal was announced, many of the legislation’s biggest supporters within the EU establishment celebrated online with their own comments and praise.

Jan Huitema, a Dutch MEP, said:

With these targets, we create clarity for the car industry and stimulate innovation and investments for car manufacturers. In addition, purchasing and driving zero-emission cars will become cheaper for consumers.

Josef Síkela, minister of trade and industry of the Czech Republic, said:

The world is changing, and we must remain at the forefront of innovation. I believe we can take advantage of this technological transition. The envisaged timeline also makes the goals achievable for car manufacturers.

However, the most notable player in this scenario is the L’Association des constructeurs européens d’automobiles (ACEA) European Automobile Manufacturers’ Association (ACEA)

The ACEA has been striving to get more producers and suppliers on the right path towad reducing GHG emissions throughout their supply chains, by investing in more renewable sources of energy production that promote the concept of “climate-neutral road transport.” The association has called on transport manufacturers operators, particularly for heavy trucks (trucking), to embrace the future of Zero-Emission Trucks.

The uncertainties caused by geopolitical trends are manifested between the EU’s industrial policies and Russia’s Arctic Strategy. It points to this conclusion: the future of global economic development is going to depend heavily on the effective production and supply of global commodities around the world, during increased geopolitical tensions over sovereignty.

On the other hand, one of the biggest industrial trends for global mining projects is related to Environment, Social, Governance (ESG) frameworks.

The aspects of producer economy areas and indigenous groups’ issues play a big role in this phenomenon — and rightly so in my view. These trends are part of the much larger geopolitical trends that have been kickstarted by the global COVID-19 pandemic. The global pandemic has caused several countries to unravel, with socio-political instability that was building up for decades, and causing the global economy to be shaken up with uncertainties, putting the world’s largest companies in some of the most vulnerable areas.

Many of the global mining projects, especially the ones for copper and nickel, are critical to achieving progress on the Energy Transition, most notably for renewable energy installations and EV market share.

The world’s largest metal miner BHP group plans to source and produce metals while taking a more sustainable and environmental focus on their operations globally. There are basically three main commodities in this future facing commodities space: copper, nickel and potash. The former two are both metals directly related to metal mining and stainless steel production, while the latter is primarily used as a source of fertilizer.

It’s true that BHP has been divesting its oil and gas assets for “future facing commodities” such as copper, nickel and potash.

The concept of future facing commodities is still new to many people. It has already become synonomous in global business news with “tougher jurisdictions” that are associated with vulnerable areas of political control and regulatory corruption.

This implies that that the company will have to venture out to new areas — i.e. “tougher jurisdictions” — containing the high-grade copper, nickel and potash production capabilities desired for such results. CEO Mike Henry also announced at the FT Mining Summit in 2021 that BHP Group wants half of its revenues to come from the production and exports of these future facing commodities by 2030.

The example of BHP Group’s sustainable mining practices are in line with the narratives from a variety of CEOs on Future-Facing Commodities.

Goldman Sachs predicts automakers will find some relief from metal shortages in the near term, but with the global consumption of battery metals continuing in the long term, that demand is likely to catch up with supply and send metal prices soaring in the future.

The most commonly produced battery metals are nickel, cobalt and lithium.

Though most importantly the current situation of battery metals is linked to what happened on the London Metals Exchange (LME) in March 2022 when the price of nickel hit $100,000 a tonne — forcing the LME to shut down its commodity trading platform.

The metals markets have yet to fully recover from what happened on the LME this year, due to the ongoing Russia-Ukraine conflict and Shanghai lockdowns in China. Legal disputes are pending, too.

Many analysts are pointing to the so-called “old economy’s revenge” as a way to understand market forces along with the sharp rise in prices of global commodities across the board.

According to Jeff Currie of the Financial Times,

“the 2000s and ’70s have a lot in common and it’s a whole idea of redistributional policies.”

By this remark, Jeff Currie asserts that the global economy is currently undergoing a third global commodity supercycle since the 1970’s.

He argues that the global economy underwent the same underinvestment theme — i.e., “the revenge of the old economy” — during the late 1960s and early 1970s which meant that poor capital investments in the old economy led to more capital in the new economy.

Watch the full interview with Jeff Currie on the Hidden Forces podcast with Demetri Kofinas.

My objective in this writing was to share some ideals about the future direction of industrial policies under the backdrop of increasing market share for Electric Vehicles (EVs), and how the geopolitical trends would have an effect on electric mobility (E-Mobility).

I offer three potential breakthroughs:

1.) EV Charging Networks are likely to redefine how transportation and mobility will be viewed as a mode of industrial production on a global scale ushering in the new era of Industry 4.0 at the consumer level;

2.) Raw Materials are already taking on a more prescient position in how EVs are produced as the regulatory environment puts a high degree of attention on when and if China and Russia seek to take market share for industrial prodution of critical metals;

3.) Battery Investments will force producers to ensure supply security in some of the world most vulnerable areas, as EV batteries are evolving into a large-scale industry putting an emphasis on miners’ Environment, Socal, Governance (ESG) frameworks as a means of carrying out corporate strategies in line with shareholder values.

I conclude by saying that the demand for raw materials, commodities and energy are producing effects in the foreign policy area of many countries today, including in both developing and developed areas. Sanctions on Russia have come on quite strong with the oil and gas price caps.

Future advancements and achievements in the new Space Race are a top priority for China’s and Russia’s geopolitical objectives vis-a-vis the United States and European Union.

The competition for this new Space Race allows for China and Russia to use this adversarial tools of infleuence, such as information, to use against the United States and European Union, to the effect of bolstering “anti-Western” values of their domestic populations.

The examples of China and Russia do indeed prove how crucial commodities are becoming to geopolitics. One aspect of the China-Russia relationship depends on how much damage the sanctions from the United States and European Union will cause to the industrial production modes around critical metals. While both countries seek to dominate the production and supply of critical metals, of which those commodities are directly linked to the aerospace industry, and therefore are likely to aggravate tensions in the long-game of geopolitics for decades to come.

I’ll be publishing The Weekend Brief (TWB) regularly touching on aspects of the global markets (including stock markets) which are at the nexus of tech, industrials and global commodities. Please follow the publication Areas & Producers to read more content about the future of core areas and critical producers of the global economy.

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