The subsequent commodity supercycle may begin and finish with Chinese language Graphite, the one most essential battery materials proper now when it comes to provide and demand.

And one of many world’s prime producers is a North American firm with processing services arrange in China proper subsequent to one of many world’s largest graphite mines.

Now, it’s gearing as much as grow to be a really distinctive graphite bridge between China and the USA.

The timing is essential: Battery and EV makers are actually fretting about graphite, the battery materials that makes up 30% of each battery and serves because the detrimental finish, or the “anode”.

With out it, there could also be no lithium-ion battery, and whereas battery and EV makers have been busy making an attempt to safe offtake agreements for lithium, graphite is now anticipating a significant provide squeeze.

Some 70% of all graphite comes from China, and Graphex Group Ltd (GRFXY, 6128.HK) already seems to be to be one of many High 5 producers in China of spherical graphite manufacturing and one of many prime on the planet.

Now, Graphex plans to construct a bridge again house.

Bolstered by long-term contracts with the Chinese language state-owned enterprise and profitable offtake agreements with main producers alongside the battery and EV provide chain, Graphex is now planning a significant growth of manufacturing.

And it’s working to convey its processing expertise to North America, too.

A Looming World Graphite Scarcity?

With graphite comprising nearly half the supplies combine within the lithium-ion battery, the singular incontrovertible fact that 13 battery gigafactories are being deliberate for the USA alone may trigger a furor alongside the availability chain.

• Tesla Inc. (NASDAQ:TSLA) has a brand new ‘Gigafactory Texas’ in Austin

• Ford Motors (NYSEF) has lined up 3 gigafactories in Tennessee and Kentucky

• Common Motors (NYSE:GM) has plans to construct 4 gigafactories in joint ventures with LG Chem (OTCPK:LGCLF) and LG Power Resolution (LGES).

• SK Improvements plans to construct two battery factories in Georgia

• Stellantis N.V. (NYSE:STLA) is teaming up with LG Power Resolution and Samsung SDI to construct two factories elsewhere within the U.S.

• Toyota Motor Corp. (NYSE:TM) is constructing one in North Carolina; and …

• Volkswagen (OTCPK:VWAGY) is on observe for a gigafactory in Tennessee.

Story continues

The Division of Power says the worldwide lithium battery market is anticipated to develop by an element of 5 to 10 within the subsequent decade.

That has EV and battery producers scrambling for offtake agreements with producers and processors.

And it’s not nearly batteries for the $3-trillion EV market …

Some huge cash is being invested into the battery storage business at giant. Which means large-scale battery storage options for photo voltaic and wind energy to counter the intermittent nature of those clear vitality sources.

UBS estimates that the USA vitality storage market may develop to $426 billion over the following decade.

None of it occurs with out graphite.

All of this renders graphite a battery materials of nationwide curiosity and world strategic urgency.

It’s a tricky sentiment for us to digest when you think about that the U.S. hasn’t produced any graphite for many years.

The one graphite deep processing services on the planet are stated to be in China, the place Graphex Group Ltd. (GRFXY, 6128.HK) has been working since 2013.

With the vast majority of the world’s graphite coming from China, and most anodes in EV batteries or vitality storage elements requiring graphite, a prime producer like Graphex Group Ltd, with growth plans within the works, could stand to learn enormously–and will reward buyers within the course of.

Bringing Graphite Residence

We predict Graphex Group Ltd (GRFXY, 6128.HK) is without doubt one of the finest methods for North American buyers to get in on a home-grown producer that’s a part of the commodity supercycle that will depend on China.

Whether or not batteries are manufactured in Asia, Europe or North America, it makes no distinction: A lot of the graphite originates in China and is additional processed in China.

Graphex Group’s setup is already spectacular. It’s bought main long-term contracts with China, and over the following 5 years, they count on development within the double digits.

Proper now, Graphex says it’s producing 10,000 metric tons of spherical graphite, representing round 5% of China’s whole spherical graphite manufacturing.

Over the following three years, armed with long-term processing contracts, Graphex plans to broaden that manufacturing to 40,000 metric tons.

The corporate reported 28% margins and $51 million in revenues in 2020. When it ramps up manufacturing, we’re anticipating an awesome setup for buyers who had the wherewithal to leap in on graphite at what seems to be just like the prime time.

That is all made doable as a result of the truth that Graphex’s processing services are proper subsequent to the most important flake graphite supply on the planet, in China’s Heilongjiang Province.

And its graphite processing expertise is all protected by a litany of patents–23 in whole–overlaying every thing from manufacturing strategies and tools design to environmental safety and graphene purposes.

These are graphite processing veterans, with a long-running observe report in an business the place the barrier to entry is kind of excessive. This isn’t a sport for newcomers.

Bringing this expertise house may save producers some huge cash …

And in an environmentally pleasant method: Graphex (GRFXY, 6128.HK) says it produces pure graphite, not the energy-intensive, coke-based artificial model.

Focusing not solely on manufacturing growth in China however on its expertise processing capabilities all over the world, Graphex’s proprietary expertise may very well be used to allow miners to improve much less precious flake graphite into way more precious uncoated spherical or coated spherical graphite. That’s a distinction of about $600 per ton and as much as $12,000 per ton.

In North America, Graphex says it’s working with downstream firms to create options for the proposed building of services and manufacturing strains for spherical graphite.

Think about bringing graphite house after nearly whole domination by China simply as a provide crunch begins to affect the $3-trillion EV business?

However Graphex’s plans go far past : Additional afield, Graphex (GRFXY, 6128.HK) says it plans to associate with auto provide chain firms for the manufacturing of spherical graphite, with downstream growth into anode and battery manufacturing.
We haven’t seen a extra bullish graphite push than this …

With 13 gigafactories anticipated to be on the best way within the U.S. alone, and large-scale vitality storage options raking in billions in growth cash, bringing graphite house could also be one of the vital enticing funding themes on the market.

And it’s all being finished by business veterans who’ve already earned one of many prime spots on this battery supplies phase.

Electrical Automobile Producers Are Set To Develop In The Coming Years

Common Motors (NYSE:GM) is without doubt one of the most revered and acknowledged automakers on the planet, and now they’re branching out and ditching inner combustion engines, different legacy automakers will seemingly observe go well with. Although Common Motors has been round for a very long time, it is a turning level for the corporate. They’re making their finest efforts to curb emissions, and it’ll seemingly repay over time. Not solely will it maintain older shareholders completely satisfied, it may attract new investments from extra ESG-focused buyers.

In a significant announcement final yr, the highest-selling U.S. automaker stated it might supply 30 all-electric fashions globally by the center of this decade. A complete of 40 % of the corporate’s U.S. fashions provided will probably be battery electrical automobiles (BEVs) by the tip of 2025.

Just lately, GM dropped one other bomb in the marketplace with the announcement of its new enterprise unit, BrightDrop. The corporate is seeking to seize a key share of the burgeoning supply market, with plans to promote electrical vans and companies to business supply firms.

GM isn’t simply betting large on EVs, both. It’s additionally seeking to capitalize on the autonomous automobile increase. Just lately, it introduced that it’s a majority-owned subsidiary, Cruise, has simply acquired approval from the California DMV to check its autonomous automobiles and not using a driver. And whereas they’re not the primary to obtain such an approval, it’s nonetheless big information for GM.

Cruise CEO Dan Ammann wrote in a Medium put up, “Earlier than the tip of the yr, we’ll be sending vehicles out onto the streets of SF — with out gasoline and with out anybody on the wheel. As a result of safely eradicating the motive force is the true benchmark of a self-driving automotive, and since burning fossil fuels is not any solution to construct the way forward for transportation.”

Ford (NYSE:F) is one other Detroit veteran making waves within the EV world. Along with brand-new electrical variations of its best-sellers, the F-150 and iconic Mustang, it’s additionally carving out its personal place within the hydrogen race, as nicely. In truth, it not too long ago even unveiled the world’s first-ever gasoline cell hybrid plugin electrical automobile, the Ford Edge HySeries.

Ford turned the best-performing auto business inventory final yr, beating investor favourite Tesla because it doubled down on an all-electric future. 2021 was “really a breakthrough yr for Ford … simply a very powerful yr strategically for the corporate because the monetary disaster,” Morgan Stanley analyst Adam Jonas informed CNBC.

This yr noticed hovering orders for the corporate’s Mustang Mach-3 SUV, together with an order for 184 of the EVs from a number of New York Metropolis authorities companies. The order is available in at $11.5 million, placing the value tag for the Mach-3 SUV at $62,500. But persons are shopping for them like scorching truffles based mostly on order numbers.

And it’s not simply the Mach-3, both. Final month, Ford needed to halt reservations for the upcoming F-150 Lightning pickup truck after hitting 200,000.

Thanks to an enormous inflow of millennial cash and the multi-trillion-dollar inexperienced vitality increase, Tesla Inc. (NASDAQ:TSLA) has emerged as one of many fastest-growing shares of all time.. And although it has been caught in some controversial stances this yr, like Elon Musk’s choice to purchase…after which promote bitcoin, the corporate remains to be as promising as ever.

“It’s no shock that Tesla’s nonetheless dominating electrical automobile gross sales as a result of they’re the one ones that basically have viable merchandise in full swing,” IHS Markit affiliate director Michael Fiske informed CNBC.

“In a development market, it’s extraordinarily difficult to keep up majority market share, no matter business. … As we begin to transfer towards a bigger and actually important variety of producers which can be going to be enjoying within the house, Tesla has to lose share.”

Tesla’s largest rival in China, Nio Restricted (NYSE:NIO) is seeking to tackle the king in its homeland. The corporate is ramping up gross sales and trimming its financials, and beginning to make headway domestically.

Nio plans to construct 4,000 battery-swapping stations worldwide by 2025, Reuters has reported, citing the corporate’s president Qin Lihong.

Battery swapping is rising as a faster different to EV charging, which regularly nonetheless takes hours, making EVs much less interesting to potential consumers. But swapping a battery may take about as little because it takes to fill a tank of gasoline, which can make this strategy to charging much more fashionable sooner or later.

Nio plans to begin small, with 700 battery-swapping stations this yr, earlier than including one other three thousand and alter over the following 5 years.

Chinese language up and comer Xpeng Motors (NYSE:XPEV) has developed an all-electric, totally autonomous automotive that may be ordered with a number of faucets in your telephone. It contains a vary of 250 miles and can get you from level A to B in much less time than it might take to hail a cab or drive your self. This game-changing firm is about to disrupt the world’s automotive business with unparalleled comfort and affordability for everybody.

Xpeng has additionally been drawing loads of curiosity from Large Cash, managing to boost practically a billion {dollars} from heavy hitters corresponding to Alibaba, Abu Dhabi’s sovereign wealth fund Mubadala Qatar Funding Authority, Hillhouse Capital, and Sequoia Capital China.

Complete EV gross sales in China surged by 154 % to three.3 million final yr, ZoZo Go estimates. Carmakers BYD—backed by Warren Buffett—in addition to Wuling and Xpeng achieved record-high gross sales in December.

Furthermore, China accounted for greater than half of all EVs bought globally in 2021, ZoZo Go says.

This yr, strong development is about to proceed as a result of subsidies are now not an element, stated Michael J. Dunne, CEO at ZoZo Go.

“Till 2020, most EV gross sales in China had been induced through subsidies, rebates and quotas. That period is over. NIO, Xpeng and BYD are constructing world-class EVs that Chinese language consumers are embracing on their very own deserves. Subsidies are now not an element,” Dunne wrote earlier this month.

Li Auto (NASDAQ:LI) is one other up-and-comer within the Chinese language electrical automobile house. And whereas it is probably not a veteran out there like Tesla and even NIO, it’s rapidly making waves on Wall Avenue. Backed by Chinese language giants Meituan and Bytedance, Li has taken a distinct strategy to the electrical automobile market. As a substitute of choosing pure-electric vehicles, it’s giving customers a alternative with its trendy crossover hybrid SUV. This fashionable automobile might be powered with gasoline or electrical energy, taking the sting off drivers who could not have a charging station or a fuel station close by.

Li Auto has already seen its inventory value practically double since its IPO. And although it hasn’t fairly returned to its all-time highs, it stays a reasonably secure inventory. It’s already price greater than $30 billion nevertheless it’s simply getting began. And because the EV increase accelerates into excessive gear, the sky is the restrict for Li and its rivals.

Demand for electrical automobiles has been ramping up steadily for years. However as we’re approaching the tipping level, there’s an issue that many individuals are nonetheless ignoring And that is the place Chargepoint (NYSE:CHPT) is available in, one of many largest charging station networks within the nation.

This main EV infrastructure participant went earlier this yr via one of many market’s hottest traits. That made them the primary EV charging inventory to have gone public through a reverse merger with a particular objective acquisition firm, or SPAC. In relation to the supercharged Stage 2 EV charging stations, ChargePoint is the clear chief within the business.

Whereas Stage 1 stations can help you cost a Mercedes B Class 250e in round 20 hours…Stage 2 chargers reduce that down to simply 3 hours to totally cost that very same automobile.

That is an enormous distinction for folks frightened about having to spend practically a day charging their automobiles earlier than getting again on the highway. And ChargePoint has a whopping 73% of the market share of networked Stage 2 charging stations.

One other charging infrastructure firm, Blink Charging Co. (NASDAQ:BLNK) owns, operates, and gives EV charging tools and networked EV charging companies in the USA.

Blink Charging actually is a mature firm, having been round since 1998. Its distinctive proposition is that most of the firm’s charging stations are present in sensible places, corresponding to airports and resorts, making it handy for drivers to cost up whereas ready on flights or of their rooms.

Blink has additionally been significantly energetic inking new offers, together with 26 dual-port Stage 2 IQ 200 EV charging stations at key Burger King places throughout the Northeast; 20 Blink-owned IQ 200 electrical automobile charging companies with Illinois’ Blessing Well being, and an unique seven-year settlement with Lehigh Valley Well being Community for the previous to personal and function charging stations throughout the well being community’s intensive portfolio of places.

GreenPower Motor (TSX:GPV) is an thrilling firm that produces larger-scale electrical transportation. Proper now, it’s primarily centered on the North American market, however the sky is the restrict because the stress to go inexperienced grows. GreenPower has been on the frontlines of the electrical motion, manufacturing inexpensive battery-electric busses and vehicles for over ten years. From faculty busses to long-distance public transit, GreenPower’s affect on the sector can’t be ignored.

NFI Group (TSX:NFI) is one other considered one of Canada’s most enjoyable electrical mass-transit makers. Although it has not but rebounded from January highs, NFI nonetheless gives buyers a promising alternative to capitalize on the electrical automobile increase at a reduction. Along with its more and more optimistic monetary studies, it is usually one of many few within the enterprise that truly pay dividends out to its buyers. That is big as a result of it provides buyers a possibility to realize publicity to this booming business whereas the inventory is affordable and maintain regular till the market lastly discovers this gem.

One other solution to acquire publicity to the electrical automobile business is thru AutoCanada (TSX:ACQ), an organization that operates auto-dealerships via Canada. The corporate carries all kinds of latest and used automobiles and has all sorts of monetary choices accessible to suit the wants of any client. Whereas gross sales have slumped this yr as a result of COVID-19 pandemic, AutoCanada will seemingly see a rebound as each shopping for energy and the demand for electrical automobiles will increase. As extra new thrilling EVs hit the market, AutoCanada will certainly be capable to journey the wave.

Lithium Americas Corp. (TSX:LAC) is considered one of America’s most crucial and promising pure-play lithium firms. With two world-class lithium initiatives in Argentina and Nevada, Lithium Americas is well-positioned to journey the wave of rising lithium demand within the years to return. It’s already raised practically a billion {dollars} in fairness and debt, displaying that buyers have a ton of curiosity within the firm’s bold plans.

Lithium America shouldn’t be trying over the rising stress from buyers for accountable and sustainable mining, both. In truth, considered one of its major targets is to create a optimistic affect on society and the setting via its initiatives. This contains cleaner mining tech, robust office security practices, a spread of alternatives for workers, and robust relationships with native governments to make sure that not solely are its workers being taken care of however native communities, as nicely.

Celestica (TSX:CLS) is a key firm within the useful resource increase as a result of is function as one of many prime producers of electronics in North America. Celestica’s big selection of merchandise contains however shouldn’t be restricted to communications options, enterprise and cloud companies, aerospace and protection merchandise, renewable vitality, and even healthcare tech.

On account of its publicity to the renewable vitality market, Celestica’s future is tied hand-in-hand with the inexperienced vitality increase that’s sweeping the world in the meanwhile. It helps construct good and environment friendly merchandise that combine the newest in energy technology, conversion and administration expertise to ship smarter, extra environment friendly grid and off-grid purposes for the world’s main vitality tools producers and producers.

Teck Assets (TSX:TECK) may very well be one of many best-diversified miners on the market, with a broad portfolio of Copper, Zinc, Power, Gold, Silver and Molybdenum belongings. It’s even concerned within the oil scene! With its free money stream and a decrease volatility outlook for base metals together with a rising push for copper and zinc to create batteries, Teck may emerge as one of many yr’s most enjoyable miners.

Although Teck has not fairly returned to its January highs, it has seen a promising rebound since April lows. Along with its optimistic trajectory, the corporate has seen a good quantity of insider shopping for, which tells shareholders that the administration staff is critical about persevering with so as to add shareholder worth. Along with insider shopping for, Teck has been added to quite a lot of hedge fund portfolios as nicely, suggesting that not solely do insiders consider within the firm, but in addition the good cash that’s actually driving the markets.

By. Tom Kool

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ

CAREFULLY**

Ahead-Wanting Statements

This publication accommodates forward-looking data which is topic to quite a lot of dangers and uncertainties and different elements that would trigger precise occasions or outcomes to vary from these projected within the forward-looking statements. Ahead trying statements on this publication embrace that the worldwide vitality transition will proceed as anticipated and that electrical automobiles will proceed to develop in market share and acceptance; that demand for Electrical Automobile Batteries and the part supplies and minerals used to supply electrical automobile batteries will proceed to develop considerably; that the marketplace for graphite and associated merchandise will proceed to broaden and obtain double digit development within the subsequent a number of years ;that there will probably be shortages in China, U.S. and globally of the graphite obligatory to supply electrical automobile batteries; that Graphex Group Restricted (the “Firm”) can leverage its present operations and status in China to seize market share of world graphite demand; that the Firm can broaden its enterprise operations to the U.S. and European markets and acquire important market share for the availability of graphite for electrical automobile batteries; that the Firm can leverage its proximity to graphite mines to broaden its operations and seize market share for world graphite demand; that the Firm can obtain its enterprise plans and goals as anticipated. These forward-looking statements are topic to quite a lot of dangers and uncertainties and different elements that would trigger precise occasions or outcomes to vary materially from these projected within the forward-looking data. Dangers that would change or stop these statements from coming to fruition embrace that the worldwide vitality transition could not proceed as anticipated and that different sorts of different vitality automobiles could also be developed and acquire market share over present sorts of electrical automobiles; that demand for electrical automobile batteries as presently produced and the part supplies and minerals used to presently produce electrical automobile batteries could also be lower than anticipated for numerous causes together with the event of other supplies and applied sciences; that the marketplace for graphite and associated merchandise could not broaden and obtain development as anticipated; that for numerous causes, together with manufacturing of graphite or different applied sciences by different rivals of the Firm, there is probably not shortages of or will increase in demand for graphite in China, U.S. and/or globally as anticipated or in any respect; that the Firm could also be unable to leverage its present operations and status in China to seize substantial market share of world graphite demand; that the Firm could also be unsuccessful within the growth of its enterprise operations to the U.S. and European markets and fail to realize important market share for the availability of graphite for electrical automobile batteries in China and/or globally; that the Firm could also be unable to leverage its proximity to graphite mines to broaden its operations and seize market share for home and world graphite demand; that the enterprise of the Firm could also be unsuccessful for numerous causes. The forward-looking data contained herein is given as of the date hereof and we assume no duty to replace or revise such data to mirror new occasions or circumstances, besides as required by legislation.

DISCLAIMERS

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