EV action among manufacturers stood out on our ESG Platform in recent weeks with companies making big capital outlays for battery resources and production capacity. Supply chains remain the focus with activities aimed at shoring up metals for battery production via direct investment and partnerships. We explore the moves among key players.
ESG performance on our ESG Safeguard platform was marked by automotive companies shoring up supply chains and continuing to develop clean solutions. In recent weeks many manufacturers in the U.S. and abroad have made moves to insulate their supply chains from macroeconomic shocks, particularly when it comes to the metals involved in producing batteries for electric vehicles, as well as develop other partnerships and innovations.
General Motors (GM:US) is making a sizable investment in Australian mining company Queensland Pacific Metals to secure cobalt and nickel sources. With companies seeking to reduce their reliance on third parties for natural resources, it makes sense that more and more manufacturers are looking to direct investments as a form of vertical integration to insulate their supply chains.
Likewise, LG Energy and Honda (7267:JP) have committed to build a $4.4B battery plant in Ohio that will break ground in 2023 to bring more of their manufacturing and supply chain into North America. We expect to see more of these moves in the near future, and further exploration of natural resources like metals, especially in North America.
Volvo (VOLV.B.SE) is supplying Amazon (AMZN) with electric trucks for its fleet in Germany. Volvo has also recently partnered with Belgium based CMB.Tech on hydrogen solutions for their marine and industrial engines. Amazon has been a large producer of renewables around the world, giving them the capability to support and fuel large fleets of electric vehicles. Volvo is ideally positioned to provide more solutions for other fleets looking towards cleaner options, whether it is hydrogen or electric, given their intersection between industrial engines and consumer EVs.
Tata Motors (500570:IN) is developing another solar project with Tata Power to help build out infrastructure that will enable scalability of EV use in India and in turn enable sales. Tata’s latest EV the Tiago sold 10,000 cars on its first day on the market, showing the popularity of these EVs in India. Tata Motors has been on our radar for a while as they have been working closely with Tata Power to go green with India’s infrastructure, and set out the goal of beating out Tesla on price and preference in their home market. The latest sales of their Tiago model shows they may be winning on that front.
The EV boom is here to stay, as companies compete for metals and resources for manufacturing and plan global operations for the coming decades, we can continue to expect huge capital outlays to secure resources, optimize production, and continue to innovate technologies in the space. More and more industrial applications for industries that run on diesel, like mining and shipping, are looking towards hydrogen and not EVs as the favored technology. So there seems to be more than enough space for both technologies as these markets grow, with EV and hydrogen each filling different niches in the clean revolution taking place in transportation and shipping.
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