While I'm still very bullish on QPM, there was some news that I noted could be concerning for QPM in the long term and thought I'd share. I'd be interested to hear what others think as to the impact these developments could eventually have.
- Worrying signs for GM as its EV sales plunge and legacy auto stares into abyss
US automotive giant General Motors sold just 15,652 electric vehicles in the second quarter of 2023, down from 20,670 in Q1 representing a drop in sales of24%.
Over the same period Tesla sold 466,140 EVs, 30 times more than GM at a 10% quarter-over-quarter growth rate. GM sold a total of 691,978 vehicles in Q2 meaning EVs made up just 2.3% of the company’s total sales, well below the US national EV market share which is now over 7%.
https://thedriven.io/2023/07/06/worrying-signs-for-gm-as-its-ev-sales-plunge-and-legacy-auto-stares-into-abyss/
Analysis :An article from Reuters at the start of this year suggests that GM is strategically delaying EV production ramp up until 2025 in order to profit for longer from its combustion models. I haven't seen any analysis yet as to why GMs EV sales dropped so much in Q2, so I'm unsure if it the drop was due to limited supply or demand.
https://www.reuters.com/business/autos-transportation/gm-goes-slow-evs-rivals-fight-price-war-2023-01-31/
- Give nodules the nod - why the extraction of metals from the Pacific seabed must begin
To summarise, the article notes that the Clarion Clipperton Zone has an estimated340 million tonnes of nickel. In comparison, the IEA believes that 80 million tonnes of nickel needs to be mined from now between 2040 to meet global climate targets.
The main barriers to deep sea mining mentioned are environmental issues, with concerns to the damage it can cause to ocean biomes. The Economist article argues though that there'd be less damage compared to how Indonesia mines nickel. There is little mention of the economic viability of deep sea mining.
Analysis: This recent article from Nautilus suggests that deep sea mining is currently very economically unviable, so it shouldn't threat an oversupply of nickel in the short to medium term. It will be interesting to see if countries or companies spend adequate R&D to try and make deep-sea mining viable in the long term.
https://nautil.us/the-dubious-economics-of-deep-sea-mining-309597/
- Indonesia in Talks with 3 Unnamed Countries for Opec-Like Nickel Cartel
Resource-rich Indonesia has been proposing a group of nickel-producing countries that operates in a similar manner to the Organization of the Petroleum Exporting Countries (Opec). The Opec says it aims to coordinate the petroleum policies of its member states and keep the oil markets stable. And Indonesia wants to see a similar group for nickel, which is a key ingredient for electric vehicle (EV)batteries.
"There are three countries whom we already have been intensely communicating with," Bahlil told reporters in Jakarta on Friday, commenting on the progress of the Opec-style nickel group.
The minister, however, refused to disclose the name of the said countries. When asked about their initial response to the plan, Bahlil said: "[they thought] it was a great idea, but we still need to work on the details of the proposal."
https://jakartaglobe.id/news/indonesia-in-talks-with-3-unnamed-countries-for-opeclike-nickel-cartel
Analysis: This news is probably more neutral, depending on whether Australia is one of the 3 unnamed countries that Indonesia is in discussions with. It'll be interesting to see if such a cartel eventuates, if it can get enough nickel-mining countries to join in order to significantly influence nickel supply, and if it can implement mechanisms that prevents game theory like scenarios in similar organisations such as OPEC.
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