In part two of this CleanTech Talk interview with Rodney Hooper of RK Equity, I started off by asking about his forecasts for EV market share in Europe. He expects that plugin vehicles will account for 18.5% of vehicle sales in Europe this year (well above his US forecast of 15% by 2025). At that percentage, we’re getting into a much more mainstream, mass-market buyer group, so I asked about his thoughts on plugin vehicle share evolution beyond 2021.
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Forecast for Europe Plugin Vehicle Market Share
Rodney noted that after this year automakers run out of the “supercredits” they are able to use to a certain extent to delay compliance with EU regulations, but at the same time, you don’t see another step change in CO2 limits until 2025. So, overall, Rodney thinks we could see a flattening off in battery cell production growth starting next year as a result of the flattening CO2 limits. However, on the flip side, companies like Volkswagen may have decided that they want to truly lead in the market, and since the transition is to 100% eventually, better to try to get there first. “If you’re saying this is the future, then you obviously want to get your market share up,” Rodney noted.
Taking everything into account, Rodney is forecasting 25–30% plugin vehicle market share in Europe by 2025 in his model. He then has it reaching 60–70% by 2030. That assumes the EU shifts to a 50% emissions cut by 2030 target, rather than 37.5%.
Thoughts on Volkswagen Power Day
Regarding Volkswagen Power Day, Rodney saw two big components as particularly positive: 1) the 240 GWh battery production target by 2030, which is a significant plus showing a commitment to reach high EV volumes, and 2) the bi-directional charging plans. (I wrote about the latter at length here: “How Much Does Volkswagen’s Bi-Directional Charging Innovation Matter?” More on the battery announcements can be found here and here.)
Natural vs. Synthetic Graphite
However, Rodney was disappointed with some non-green components of the presentation, particularly a focus on synthetic graphite — “which, to me, is a big no-no; it’s needle coke, it’s a bi-product of fossil fuels that you’re using as your main product, and then there’s a lot of heating and things that go on from there.”
“Why would you go the fossil fuel feedstock route and use needle coke and use synthetic graphite?”
Furthermore, he noted that the market seems to be moving in the other direction. He noted that Benchmark Mineral Intelligence sees the share of the graphite market shifting from about 50–50 today to ⅔ natural graphite versus ⅓ synthetic graphite by 2030. “So, most of the industry is looking to go to natural graphite because it’s — on an environmental perspective, on a carbon footprint perspective, is a lot lower, and the quality will do the job.”
One other thought Rodney had was that Volkswagen was primarily focused on presenting on things it could count on, considering it was such a noteworthy and heavily broadcast presentation. He also noted that he’s skeptical about solid-state batteries becoming competitive, QuantumScape included, and was happy Volkswagen didn’t spend much time on that.
Volkswagen Battery Production
Regarding Volkswagen’s battery production plans, among other comments, he noted, “It’ll be interesting to see how they sort of swim upstream to facilitate all the raw materials going into either Northvolt’s plants or their own. But it was very encouraging in terms of spinning out and doing their own thing, adding to it and then going to Northvolt. So, again, they are making the right noises and moves but it’s not all the pieces of the puzzle.”
Hyundai, Kia, & Stellantis
I know many readers get excited about Hyundai, Kia, and Stellantis developments, so I also asked Rodney a bit about his perspective on their plans and progress. He actually holds more or less the same position as me, that despite some positive statements and movement, there’s no real indication they are serious on the battery supply side about being leaders rather than followers. Here’s how Rodney put it:
“Yeah, I don’t see anything concrete on those sides. I’ve heard various commentary about potential partners — they’ve stated some very aggressive ambitions, I’ll give them that; in terms of market share, they’re making some bold statements — but I’m not (haha), I’m not seeing an airtight supply chain, you know, backing those. So, it’s a wait and see on those.”
He noted the Hyundai–LG issues with battery fires and resulting EV recalls, and then added that many bold claims about EV sales growth appear to be detached from the progress and work necessary to make that happen on the battery side. “I think a lot of people are making a lot of bold claims about ramp-ups and capacity and what segments they’re going to move into, but yet on the same time, we’re seeing a lot of product recalls.”
Tesla Sales Forecasts
Returning to the topic of Tesla (without my prompting), Rodney also noted it was a little disappointing that the Tesla Cybertruck and Semi seemingly won’t be coming until 2022, but he added that the Model 3 and Model Y ramps appear to be following a good structure.
His forecast for Tesla sales this year, 2021, is 900,000 globally — 400,000–450,000 in China.
As far as 2022, he’s expecting somewhere between 50% to 65% growth next year as Giga Berlin and Giga Texas get rolling.
Rodney is especially bullish on the Cybertruck. “I think if they release the Cyber, it’s going to be a hit. In my opinion, it’s going to sell really well.” I added, “It’s got the potential to be a viral cultural bomb like the Volkswagen Beetle or Volkswagen Bus” (the old-school hippie bus), which incidentally led us into the Volkswagen Buzz. …
Rodney also thinks the Volkswagen Buzz will be a big hit. I noted that although there’s a ton of … buzz … around this model and many people are into it, a Volkswagen executive I talked to a few years ago noted that although they see that, they are unsure how many people will actually buy the Buzz. After all, it’s not in a typically popular market segment, and buyers are venturing out into a whole new world if they decide to actually purchase one. Nonetheless, Rodney and I see the cultural history, modern design, and electric powertrain benefits as factors that should lead to it being a very popular vehicle. We think.
Like with the Cybertruck, though, we’ll have to wait to see how the market reacts when money is on the line.
Tesla Battery Mining & Production Plans
In the last 5 minutes, Rodney offered his thoughts on Tesla’s lithium extraction plans and battery cathode and cell production plans. To get into the weeds of that topic, go ahead and at least listen to 22:00–23:30 in the above podcast.
I loved Rodney’s closing lines on a topic that goes well beyond any of this: failure. “What I like, what I love about Tesla is the ‘fail forward’ culture. It’s a growth culture,” he said. “Failure’s not seen as the end of the road. Everyone made a huge meal about production hell and under the tarpaulin and he’s failed and all the rest. Now he’s got a massive — world’s biggest casting machine — and he’s now doing his thing. So, what I like about it [is it] isn’t the kind of culture of the fear of failure.
“Failure, in my mind, is the key ingredient to success. If you don’t fail, you don’t grow, and Tesla sees this.”
He added, “As they say, the definition of an expert is someone who works within a very small field and has made every mistake possible.”
Related stories and podcasts:
- Lithium & EV Battery Forecasts For Europe, US, & China, 2025–2030 — CleanTech Talk with Rodney Hooper, Part 1
- Volkswagen’s EV Plans, European EV Sales Trends, & EV Charging In Europe — CleanTech Talk with EV Volumes
- Battery Mineral Mining Policies & Regional Trends — CleanTech Talk With Howard Klein