Porsche Implications

As reported by Electrek, "CEO Oliver Blume now says that he expects half of Porsche’s production to be electric by 2023."

Since Porsche produced 237,800 vehicles in 2016, if Blume's expectation proves correct Porsche will be producing ~118,900 electric cars by 2023 annually and they'll likely be ~95-100kw performance cars to eliminate range anxiety.

Using Syrah's chart on slide 20:
1) 118,900 Porsche cars, with 95kw of batteries per vehicle requires factory capacity of 11.2955 Gw/h (118,900 vehicles *95 kw/h=11,295,500 kw/h) which requires 11,859.75 tons of anode material.
2) Assuming a natural graphite content of 60%;
3) = Natural Graphite Demand of 7,115.85 tons
4) = Flake Feedstock of 15,654.87 tons.



At this point you're thinking 15,654.87  tons of new graphite demand is quite small compared to Syrah's output and this is true. The key point from Blume's announcement is the assumption that half of Porsche's new cars will be electric by 2023! And that this should spur the rest of the luxury car industry to follow suit.

What happens if the rest of the luxury car industry follows Porsche in adopting electric cars faster? And what happens if they shift to making electric cars 50% of their future sales by say 2023 like Porsche? Statista reports the following sales for luxury vehicles in 2016:


Luxury car sales in 2016 totalled 7,995,850 vehicles which is 33.6 times Porsche's output (7,995,850/237,800).

Key Takeaway:

If (a) the luxury car industry follows Porsche in making 50% of their new vehicles electric by 2023, and (b) 60% natural graphite is used in the respective anodes, and (c) other luxury car manufacturers make vehicles with 95-100kw battery sizes,  then by 2023, 526,003.63 tons of new flake graphite feedstock will be required from the luxury car industry alone.

Syrah is well placed to expand its operations to meet this increased demand from a flake and spherical graphite standpoint. I maintain my view that Syrah will be profitably expanding output in the coming years above 700,000 tons funded by free cash flow. Scepticism will prevent other miners from being funded in the short term allowing Syrah to dominate with its first-mover advantage generating super economic profits whilst lithium-ion batteries with natural graphite anodes are utilised.