Takeaways

• In a very recent publication, we put forward the idea that in an environment that may seem worrying for the deployment of electric vehicles, not all players or geographies were in the same boat.

• There are many examples of mining companies involved in lithium that are forced to reduce costs and/or put projects on hold.

• Faced with weak trends in commodity prices, we see that China’s exports of cars rose by nearly 40% in August to 610,000 vehicles.

• In the meantime, European OEMs are grappling with a perfect storm of challenges as they transition to full electrification.

• Electrification is not a long-term option but on the other hand, a lack of investment in new ICE models means a big risk of losing market share and miss customer’s current demand.

• The best way to understand trends in demand for battery materials, including lithium, is to see the growth in battery capacity deployment.

• BYD valuation multiples remain very attractive, including a 2025 EV/Sales multiple of 0.8x and an EV/EBIT of 12.5x versus respectively 6.1x and 63.5x for Tesla.