BYD -disrupting the markets for lithium and cobalt

A few weeks ago, during the hype of hundreds of thousands of Tesla Model 3 pre-orders, I saw a report on BYD (“Build Your Dream”), a Chinese car and battery manufacturer. While Tesla are scrambling to determine how they will meet the large demand they just created, BYD is already producing very large amounts of battery-electric vehicles today. I was drawn to their YouTube video (link below, the Spanish title seems to be an error on their part) in which BYD are demonstrating the safety of their lithium iron phosphate batteries.

These batteries are interesting because they are likely to do two things to metal markets:

  1. They will remove the issue of a cobalt shortage which is imminent – standard Li-ion batteries contain about 10% of cobalt, that’s 50kg per Tesla. Arithmetically, there just isn’t enough cobalt available in the world to prevent a market crash. See my earlier report on the topic here, and an excellent analysis by John Petersen titled “EV batteries and the cobalt cliff” here.
  2. The effect on lithium will be inverse: the metal, unchained from cobalt, can now be used more widespread than previously possible.

BYD-E6_3Intrigued by this scenario, I requested an interview with BYD which was promptly granted. I wish other companies were this forthcoming when it comes to asking about their technology. The resulting article was just published on Kitco News today, and it can be viewed here. Hope you will find it interesting.

Tesla Model 3: the car that is

You may feel about Tesla in whichever way you like, but there is no denying that today is the day people will remember as the day when the paradigms of selling cars changed forever. Thousands of people are waiting in line to pay down $1,000 on a car they have never seen, a car that may or may not be shipped in 2017, a car that – according to its creator – doesn’t even exist in its final design yet.

IMG_20160331_095433The picture shows people waiting at a factory owned store in a shopping mall (Short Hills Mall in New Jersey, USA). The line, which security estimated to be at least 200 people, winds throughout the mall and out the door. The line in the other picture shows people waiting for the new iPhone, also released today in what can only be called a marketing blunder. IMG_20160331_095110It is not the Tesla Model 3 other EV manufacturers have to worry about, it’s the way in which Elon Musk and the Tesla brand excite the masses. The Model 3 presale takes thousands of committed EV buyers off the market for at least 4-5 years (1.5 years of waiting time plus a 3 year lease). Whichever product or marketing strategy other brands may come up with, from hereon the market has been captured by Tesla for a very long time. A VERY smart move.

Electric Cars revisited: 2 weeks in a Ford Focus Electric

IMG_20151219_1306562 years ago, my electric BMW ActiveE found its early demise with an ill performing battery. It was a feeling only enthusiasts can appreciate, losing something that was flawed on a number of levels, but still something I liked a lot. So, when junior took off to San Francisco for two weeks helping crank fancy new Teslas out of the factory door I took the opportunity to drive his 3 year old Ford Focus Electric for the time of his absence.

As a result, here is some consumer advice from someone whose enthusiasm never crossed over to changing his life around an electric car like many of the pioneers and early adopters I know did.

IMG_20151219_130752The Focus is a nicely appointed car featuring a pleasant interior and lots of amenities like a multi-functional touch screen system for entertainment, navigation and phone integration. It also has heated leather seats and many other “powered” things distinguishing it from the base model. Other than my ActiveE the car blends right in and gets near zero attention from other people, which is a turnoff for hardcore enthusiasts but a plus in my book.

A trunk, alas, is largely absent. The car has front wheel drive so I am guessing it’s the battery that is hogging space in the back. Anything more than 2 grocery bags will present a problem so I frequently resorted to putting stuff on the back seats. That’s ok for sports bags but bad for groceries. I strongly recommend looking at cargo space before leasing or buying an EV as this issue will haunt you for whatever time you own the car. We actually went to the BMW dealership for a “fitting” of our sports gear before committing to the ActiveE back in the days.

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Running errands is, in fact, the primary use for this category of EV outside of commuting to work, which I don’t do. As with most cars from this generation, all the nice electric toys they give you will inadvertently consume power, and reduce range. Dramatically. Turning A/C and heating off completely, the Focus would offer me about 70 miles this time of the year (although it was quite warm during the first week). Switching the goodies on would leave me with about 50 miles which, although it’s usually sufficient to drive around within a certain radius, always leaves you looking at the battery gage. From past experience, this can be fun as driving and breaking style will influence the number shown, but it can be extremely annoying when you are in a situation where you REALLY depend on your car to get you home. Newer non-Tesla cars feature more range of 100 miles or more which is an improvement, and 200+ mile cars are on the horizon. I still sympathize with anyone opting for a gas-burning back-up engine as “plan B”.

Speaking of “plan B”, it is clear that a car like this cannot be your only car. Anything qualifying as “travel” needs to take place in a larger and gas burning car unless you are fortunate enough to be able to afford a Tesla.

Coming back to the fun part: if you have never driven an EV in your life I strongly recommend you test drive one. There is no experience like it, and the combination of agility and calming silence is very unique. That said, if you are planning to get an EV either get one with rear wheel drive or one with suitable traction control. The Focus doesn’t appear to have either and it took me some practice getting it off the line without spinning the wheels, especially in wet conditions. This, of all the downsides mentioned, would be my biggest complaint. I hope they fix it for the upcoming new version of the Focus Electric.

Bottom line: even for paranoid people like me who take issue with relying on charging stations further away that could be blocked, vandalized or otherwise rendered unusable, a sub-Tesla EV can still be useful. It’s a great and inexpensive alternative to a regular gas or diesel powered car to get around town emission free. I recommend looking at cars that offer more space like the BMW i3 (I still have a gag reflex just looking at it but that’s rather subjective, of course). I also recommend to lease, not buy, as the technology still progresses in large strides, and a three year old EV is not likely to fetch a good resale price.

 

 

 

Cobalt – the secret ingredient in lithium ion batteries

Tesla Model X Launch 2015-09-29

Cobalt prices are on the rise – check out my latest report / interview on Kitco News to find out why:

http://www.kitco.com/news/2015-10-02/Cobalt-Another-Unstoppable-Technology-Metal.html

BMW’s Transformation of Society – Still Pending

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Bodo Albrecht @ BMW i3 Unveil 2013

Hard to believe but it has been two years since my first Kitco News article on technology metals appeared. The debut piece was about BMW’s worldwide unveiling of the i3, a car destined to change society as we know it (see my report here). Two years later, battery-electric vehicles (BEVs) are still associated with Tesla more than anyone else, including Nissan and their rather successful “Leaf”, the unsung hero of this public relations battle. And, as I reported in my recent IPMI conference paper, BEVs aren’t doing so well.

Of course the Tesla isn’t priced for the masses and the BMW i3’s design may be, well, polarizing. But that is not the answer.

First and foremost, society doesn’t want to be transformed. Explanations on why BEVs are more environmentally friendly than standard cars aren’t always conclusive but in truth, a majority of consumers will always decide with their wallets, decide for convenience, decide for size, decide for familiarity. BEVs depend on charging stations; they generally have a short range leaving consumers anxious of running out of power, a very real threat, as I experienced myself.

The average BEV will achieve around 130km / 80 miles of range on a normal day. Alas, it could be half of that in cold or hot weather. Several suppliers are working on doubling their vehicle’s range, which leads us to the main culprit: lithium! As became obvious in the slow progression of performance improvements, and as was confirmed by several of my guests on “Tech Metals Insider”, lithium ion battery technology produces performance gains of just 7-8% annually. It’s the reason why power-drained smartphone users gather around airport charging stations like Neanderthals around a camp fire, and it is why BEVs are losing momentum.

Tesla’s success remains fragile in light of forever new delays in releasing new models, and BMW’s i3 continues to be a rare sight on public roads with less than 800 units sold monthly in the USA (Source: InsideEV.com), about half as many as Nissan’s Leaf. Low gasoline prices drove yet another stake in the market, removing the cost incentive from the equation with no end in sight.

So where do we go from here? After the BEVs first demise a hundred years ago, after GM “killed the electric car” several decades ago, is the technology staring down the barrel of a gun yet again? I surely hope not, and my hopes rest on hydrogen electric technology (FCEVs), a topic for another day. Unfortunately, many BEV owners including Tesla’s own Elon Musk are still viewing the technology as their enemy, not their savior.

Besides my second anniversary as a contributing writer to Kitco News, 2015 also marks the market introduction of the Toyota Mirai, a car that will hopefully be as popular as the company’s “Prius” was, the “first of many”, as the name translates. Where will we be two years from today? Lithium batteries will be 14-16% more efficient. But society may be 100% on the move to embracing new sources of energy.