What Does CES 2023 & Davos 2023 Really Mean For The World?
With some analysts calling this “a gold rush to metals” era, the world is headed for a revolutionary expansion of renewable energy power and clean energy technologies that pass off on the fossil-fuels industry.
The sad truth is that mining more metals is going to be a critical factor to the world’s Net Zero ambitions.
Whether we are talking about agriculture, energy or metals, CES 2023 and Davos 2023 are all mutually focused on one common theme: how geopolitical scenarios are disrupting global commodities — and not the other way around.
First have a look at the relevant events during CES 2023 and Davos 2023.
The 2023 Consumer Electronics Show (CES) was held in Las Vegas, United States. In this first part, I have compiled some of the technologies showcased at CES 2023 to look forward to for Electric Vehicles (EV).
To get the show started Stellantis came out with a bang as it unveiled the concept for the company’s latest Dodge Ram electric pick-up truck, which is going to hit the market alogn with other full-size trucks competing for market share of electric vehicles (EV). This EV is called the Ram 1500 Revolution; it is a battery-powered production truck.
On one of the most disputed topics related to EVs and the related marketplace, EV charging networks are redefining transportation and mobility — in this case, electric mobility (e-mobility) trends. That’s why everyone was happy to hear about Mercedes-Benz new plan to roll out an EV charging network for North American EV markets by 2027.
Another internationally-recognized French automobile brand, Peugot, announced its new concept car at CES 2023 called Inception. The Peugot car brand is owned by Stellantis after the Fiat Chrysler and PSA Group brands merged in January 2021. The name Inception was inspired from the Latin root word “Inceptio” and was built on one of Stellantis’ future battery electric vehicle (BEV) platforms. It will be powered by an 800-volt, 100kWh battery and comes with a four-wheel drive component that allows for induction — eliminating the need to recharge by electric power cables.
Next, I have compiled some of the reports on other announcements and concerns about the future of global competition in the electric battery marketplaces.
It was reported by CNN on 4 January 2023 that Apple would be raising the price for iPhone battery replacements. For example, the company will charge $89 for those who wish to replace batteries for the models iPhone X through iPhone13. There will also be a $20 raise in the price of battery replacements for models iPhone SE and iPhone 8. And that’s not at all — battery replacements for new iPad models, MacBook Air and Macbook Pro are all going up to the tune of $20, $30 and $50 more, respectively.
In a surprising turn of events, South Korea’s SK On Co. announced on 9 Janurary 2023 that the company would no longer take part in a memorandum of understanding (MOU) signed with Ford Motor Co. and Koc Holding AS to build a EV battery factory in Turkey. This plan was initially focused on producing batteries for the European market. In a related story, Hungary has been successful at attracting investments from German automakers and South Korean battery suppliers.
It’s no secret that Chinese EV producers have an edge over their American and European counterparts. In a report by Channel News Asia (CNA), it was revealed that the average price of a EV in the Chinese market had dropped to €31,829. This figure was provided from a study conducted by JATO Dynamics. In fact, the overall Asia-Pacific market is critical to the success of global EV production and battery production markets. Just look at Automotive Cells Company (ACC).
Finally, a preview of future trends that will be important for the companies seeking to grab market share in the consumer electronics space.
Undoubtedly we should start with the information technology and communications (ICT) sector. In an interview with CNBC, Qualcomm CEO Cristiano Amon spoke from Las Vegas about the issues with China’s lockdown and how the company is making automated driving systems for the growing demand for Electric Vehicles (EV). The company unveiled a concept car along with its lastest Snapdragon chip designs, which include advanced digital interactions through customer relations management (CRM) platforms that are in partnership with SalesForce.
Michigan’s automotive legacy is coming back in a big way with electrification trends. According to a report by Michigan Local News, the state is positioned to benefit handsomely from a total amount of $14 billion in investments for EV production and battery manufacturing. The report also noted that the Strategic Outreach and Attraction Reserve (SOAR) fund has generated around $1 billion for the state’s automotive sector.
Ars Technica is fantastic source for all things related to technology, future and society. As a follow up to CES 2023, Jonathan M. Gitlin wrote about How many electric car chargers is enough? Read more about the problems associated with EV charging networks and infrastructure spending. There’s some politics involved, but it all boils down to rapid developments in technologies that enable EV charging networks to expand throughout American cities and beyond.
Finally, I wanted to share the United Nations Environment Programme’s The Future of Electric Vehicles and Material Resources: A Foresight Brief. It’s not only prescient but essential to understand how lithium-ion batteries will impact the future of the EV marketplace. The issues related to climate change are relevant to EVs in many ways, though the electrification and mining trends stand out as the production of more EVs requires higher levels of mining for energy-intensive metals and rare earths. I’ve been writing extensively about the electrification and mining trends in the publication Areas & Producers.
At the World Economic Form (WEF) Annual Meeting 2023 held in Davos, Switzerland, from 16 January to 20 January 2023, Morocco’s OCP Group chairman and CEO, Mostafa Terrab, addressed the WEF in a blog post about How Africa can help feed the world with this opening line, “We meet at a defining moment for humanity.”
As an African country, Morocco faces similar issues to other countries on the continent in terms of demographics and climate change. That’s why Terrab called the transition to sustainable, smarter farming an urgent concern for the world’s food systems, but particularly in Africa where fertilizer application is significantly lower than the global average.
To effectively solve these problems in Africa’s agriculture industry, OCP Group seeks to help African farmers maximize crop yields by applying precision agriculture (PA) techniques that can adapt to localization of farming throughout areas of Africa. In the end, this will require access to the right inputs, supply chains, financial tools, and innovations — thus, it is a mutual issue of accessibility and sustainability.
To this end, the OCP Group CEO acknowledges that the world is becoming aware of these critical problems and solutions for global food security. At the same time, they are becoming more aware that African farmers are a key part of the solution to not only combatting food insecurity, but also climate change.
Morocco’s OCP Group is one of the world’s largest fertilizer producers, holding the world’s largest reserves of phosphates. The company also announced on 22 January 2023 a strategic supply agreement with India to sell 1.7 million tonnes of phosphates fertilizer products over a period of one year. The significance of this deal occurs during a time when India’s largest source of fertilizer imports — Russia and China — have curtailed exports due to domestic concerns. To read more about the global fertilizer industry and geopolitical scenarios, here’s everything you need to know in Fertilizer Diplomacy 2.0.
Nutrien Ltd. CEO Ken Seitz spoke to Wall Street Journal reporters during the WEF Annual Meeting. He noted that fertilizer prices will continue to be problematic for farmers and producers in 2023. Because of price volatility for agricultural commodities, which he attributed to the war in Ukraine, fertilizer prices are likely to remain on an uncertain trajectory as the year goes on.
Sanctions on Russia and Belarus are one part of the story. Seitz pointed out that potash exports from Russia and Belarus were once one of the biggest suppliers to global markets, and now they have been effectively reduced to 20% and 50%, resepectively, according to figures in 2022.
Nutrien Ltd. had already announced that it would increase output of its potash fertilizer capabilities from approximately 14 million tonnes to 15 million tonnes in response to the ongoing global fertilizer shortage and supply crisis in 2022. It seems that the company has enough production capacity to increase its output even more in 2023. To know more about Nutrien Ltd and CEO Ken Seitz, read this story about The CEOs Leading in the Transition to Future Facing Commodities.
One of the biggest voices of the global fertilizer industry at the WEF Annual Meeting this year was Norweigan fertilizer producer Yara International.
During the panel session with other corporate, government and philanthropic leaders, they collectively spoke about the issues facing the global fertilizer industry in the future, such as soil health concerns and climate change scenarios. This put into perspective how crucial it is for fertilizer producers to commit to carbon emissions reduction in their supply chains, as well as in non-energy emissions, such as methane.
Moreover, Holsether has been very vocal about the global food crisis as a result of disruptions from the war in Ukraine since May 2022, when he told reporters at BBC World News, “Russia plays a large role both in food production but also in fertilizer production, indirectly through natural gas that is a vital part of using fertilizers, but also key nutrients like nitrogen, potash and phosphates.”
Crop nutrients rely on sources of energy, and in the case of many fertilizer producers, natural gas is the key element for production. The geopolitical scenarios are proving to have a massive effect on fertilizer production, supplies, as well as the whole global import-export scenario. On this situation, Holsether said: “The supply chains are significantly disrupted, both directly from the sanctions and indirect effects from the situation [in Ukraine]. And also the risk of Russia holding back the exports.”
In this context he is speaking about how holding back the exports would be detrimental to global food supplies, particularly grain and wheat, both of which have been politicized over the war in Ukraine with devestating impacts to food importers in developing countries. Read all about this situation in what I wrote at the end of the year in 2022 about Grain Markets & Natural Gas Production Explain Key Trends Going Into 2023.
One of the unlikely voices to come up during the WEF Annual Meeting was Indias’ Union Minister Raj Kumar Singh. In fact, his comments were one of the headlines of this year’s forum — ‘To Transform Food Systems, Give Small Farmers Irrigation, Fertilizers and Secure Market — At Lower Cost’.
Things got more personal when Singh responded to criticism over India’s purchases of cheap Russian oil. In response, he said: “India imports less gas from Russia in a month than Europe does in a day.”
And that’s also why much of the discussion revolved around the Energy Transition, as India has been working with farmers to reduce their carbon footprint by getting more of their energy sources from renewables through solar water pumps and green ammonia. This is also relevant to a key deal signed between Morocco’s OCP Group and India on 22 January 2023 that will invest more in R&D and technology.
Gro Intelligence is a data and analytics company assessing the impact of climate change and how it illuminates the interrelationships between our earth’s ecology and human economy to help see the big picture and act on the small details. WEF
Gro Intelligence founder and CEO Sara Menker was on the panel of the WEF’s Revolutionizing Food Security at Davos. Menker has been talking about Climate Change and Food Security as the world’s biggest threats since September 2022. She is definitely one of the leading voices on how technology investments, particularly using data and analytics, are the practical solutions to tackling climate change and food security.
When she spoke at the United Nations Security Council, Menker used the company’s approach to data and analytics to explain a potentially bleak future of the world: “there is no version of the world where every country has all the natural resources it needs to survive and thrive. One key takeaway from our data is how often we see repeated examples of cause and effect, highlighting surprising connections and interdependencies.”
Speaking to the panel at Davos, Menker pointed out how many people do not understand the critial linkages between food and energy production — “food security is energy security; energy security is food security.”
She pushes the fact that data acts like a catalyst to solve the biggest problems there world is facing in terms of energy and food. “Data becomes that infrastructure that allows that risk-sharing and risk-taking to happen; it sort of facilitates different players — banks, companies, governments, etc — to play their role. But it sets a baseline by which people use to make those decisions.”
Therefore, data and analytics is growing solution in how businesses can make decisions about their carbon footprint and bottom lines going forward. This, in my view, will require deeper investments in R&D as well as massive efforts to recruit different types of talent in the job marketplace. By satisfying those two conditions — and I’m open to other possibilities — is a way to increase effeciencies in technology for the food and energy sectors, which can open up a toolbox of solutions to combat climate change and food security.
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.
The example of BHP Group’s sustainable mining practices are in line with the narratives from a variety of CEOs on Future-Facing Commodities. Yet, what I don’t understand, is why aren’t the experts at CES 2023 and Davos 2023 talking about them too? In this context, there does seem to be somewhat of a divergence between how some CEOs are viewing a future for humanity revolving around sustainable economic development — and one that is going to be increasingly disrupted by geopolitical scenarios and global commodities.
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.
Sign up for TWB newsletter here to read about how publicly-traded companies, like Tesla & Stellantis, are competing in the long game for global markets.
