Battery Metals

Nissan has recently released a new six year environmental agenda and is expanding the Smyrna facility with a $1 billion lithium battery plant on site with a capacity of up to 200,000 lithium battery packs per year with the potential both for domestic production and export.

By Dave Brown – Exclusive to Lithium Investing News

Last week, Nissan (TYO:7201), releasedGreen Program 2016 to serve as a new six-year environmental agenda.  This new plan concentrates interest in three areas: a transition to more renewable energy sources; a decline in the carbon footprint; and an expansion of resource mandates used by Nissan. For lithium investors and industry stakeholders, the program further supports a midterm plan that was unveiled this June, Nissan Power 88.

Nissan is expecting to be marketing four electric vehicles, including the Nissan Leaf, which won the world car of the year award for 2011 in April. Nissan aims to take global leadership as a source for lithium batteries for the electric platform, and also create an electric vehicle charging infrastructure and information network.

Nissan’s initiative is based on the anticipation of demographic changes and increased anxieties relating to supply and demand for energy and resources, environmental impacts and inflation in emerging market economies.

Serving as the automobile manufacturer’s third environmental mid-term plan, Nissan expects to be the premiere automobile manufacturerin zero-emission vehicles with total global sales of 1.5 million encompassing the Renault-Nissan brand alliance by 2016. Nissan also is aiming to target a second-life energy storage system with used electric vehicle lithium batteries via its 4R business.

Macroeconomic climate providing potential limitations

While Nissan has not announced details of which national markets are seen as strongest targets for launching electric vehicles, the location of production for these vehicles may become a critical point of success. Currency volatility this year has seen the yen demonstrating strength against the dollar, the euro and the pound. The yen has been approaching its highest levels since World War II, which has combined with inclement weather challenges in South East Asia and supply chain disruptions from the Japanese earthquake to create difficulties this year for the overall Japanese automobile industry.

The Smyrna plant in Tennessee is anticipated to have the capacity to produce 150,000 Leaf models per year. Nissan is currently expanding the Smyrna facility with a $1 billion lithium battery plant on site with a capacity of up to 200,000 lithium battery packs per year with the potential both for domestic production and export. Other areas of lithium battery production might include England, Portugal and France targeting a global production capacity of 500,000 a year by 2015.

Domestic electric vehicle auto success

Over the last month,despite overall slightly disappointing sales results for General Motors (NYSE:GM), October turned out to be the strongest month yet for the company’s plug-in hybrid electric car, selling 1100 units of the Chevrolet Volt. The Nissan Leaf model had more disappointing numbers selling only 849 units, although both companies are expecting to target approximately a thousand cars each respectively.

The monthly motor vehicle sales are of potential interest to lithium investors as they are generally regarded as good indicators of trends in consumer spending and often are deemed forward indicators of dynamic business cycle inflection points. Overall October vehicle sales climbed slightly, just over one percent to a 13.3 million annual unit rate from the previous month. The result is primarily attributed to stronger domestic and imported car sales, with a slight decline in truck sales.

Mixed growth reports for overall phone market

Lithium investors will appreciate that the future of lithium batteries and growth of the lithium industry in general is highly dependant on the adoption and successful penetration of electric vehicles over the mid to longer term. However, a more immediate indicator of demand is impacted by lithium batteries used in applications of smart phones and personal communication devices.

The mobile phone market demonstrated good results, as it rose 12.8 percent on an annual basis compared with the third quarter of last year. This compared well with the consensus forecast of 9.3 percent; however, the results indicated some weakness in key economically mature regions as well as in the smartphone market segmentation.

 

Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.

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