EVs From China, Lithium Prices and Why Vertiv Needs a Good Q1
EVs From China, Lithium Prices and Why Vertiv Needs a Good Q1
By:James Melton
BYD: Tesla’s worst nightmare
Twelve years ago, Elon Musk scoffed at Chinese EV manufacturers. Asked about China’s BYD (BYDDY), Musk chuckled and responded, “Have you seen their car?” But he isn’t laughing anymore.
In fact, Musk recently sounded the alarm on the growing influence of Chinese EV makers, saying, “If there are no trade barriers established, they will pretty much demolish most other companies in the world.”
In 2023, BYD made 3 million vehicles, of which 1.6 million were battery-electrics. In comparison, Tesla manufactured 1.8 million BEVs in 2023, barely edging out BYD on a full-year basis. However, in Q4 of 2023, BYD finally surpassed Tesla (TSLA) in terms of total deliveries in a single quarter. Read the whole story.
Lithium lethargy
For a commodity once celebrated as “the new oil,” lithium has fallen hard—its stock price plunging 80% from the December 2022 all-time high. Blame the soft metal’s soft prices on the slowdown in demand for electric vehicles.
But is it a case of peak pessimism? The EV market’s decline has slowed. Despite a 26% monthly drop in January, global sales grew by 69% from the previous year, according to the EV analytical firm Rho Motion.
In February, the investment bankers at Goldman Sachs forecasted EVs would account for half of global new car sales by 2035. If motorists buy EVs in sufficient numbers and no new battery technology supplants lithium, companies that deal with the metal—like Arcadium Lithium (ALTM)— should be on your watch list. Read the whole story.
Vertiv Holdings has a lot to prove in Q1
Shares of Vertiv Holdings (VRT) have skyrocketed nearly 500% over the last 52 weeks because of investor euphoria linked to artificial intelligence.
Vertiv offers data center infrastructure products suited to the heavy computing workloads required by AI platforms. The company might ultimately be a winner in the AI niche. But, based on the company’s disappointing earnings outlook for 2024, the current valuation looks overextended.
Potential drives valuation in the marketplace but if it never materializes, shares usually get punished. Looking ahead, shares of Vertiv look susceptible to a potential pullback, especially if the company delivers another earnings disappointment in Q1. Read the whole story.
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James Melton is managing editor of Luckbox magazine. @JDMeltonWriter
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