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14 September 2021

Car Manufacturers Look to Alternative Batteries

As the clean energy revolution picks up momentum with the expectation of a huge rise in demand in the coming years, lithium, one of the most important materials used in current batteries, may become a bottleneck for the entire industry. Many companies are already looking for more efficient technologies.

Multiple car manufacturers around the world are planning to follow suit, hoping to capture a slice of the market. In Asia, manufacturers like Japan’s Toyota committed to spending US$13.6bn on battery development and supply focusing on solid state batteries over next decade, while South Korea’s Hyundai moves forward with fuel cell research. Samsung, BMW, and Honda are also moving forward in the solid-state battery space which provides benefits such as faster charging times, increased range for electric cars and better safety versus lithium-ion batteries. On the other hand, fuel cells are like batteries, but they do not run down or need recharging - they can run on hydrogen or other fuels. If hydrogen is used the only by-products are electricity, water, and heat. It is yet to be seen whether companies can achieve their targets on time or whether they will be left behind in the race for battery superiority.

Closer to home, the UK, once a powerhouse in the aerospace industry, is struggling to maintain its place in the global sector due to a lack of support from the government and the recent decline in demand for large jet engines, ultimately affecting companies such as Rolls-Royce. This compares poorly to France which has introduced a €15bn support package to its aviation industry, supporting the development of hydrogen-powered passenger jets, showing the country’s commitment to the industry. With a slow approach and lack of vision, the UK aerospace industry is under pressure, meaning it could continue to lose market share to its French counterparts.

In local news, Hull-based engineering business C Spencer has reported a positive trading update in its recent set of accounts despite challenging market conditions arising from the COVID-19 pandemic. In the tax year ending 31st March 2021, the company reported a turnover of £42 million and a pre-tax profit of £500,000. In the current year, the company secured work totalling £53 million with a strong pipeline of opportunities and continues to provide high-quality solutions to clients in the rail, construction and industrial sectors. With a major win in a dispute to boot, C Spencer secured £3.8m in cash for works previously undertaken, providing a major boost to funds as well as enhancing working capital reserves, thus improving the overall liquidity of the business.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
Car Manufacturers Look to Alternative Batteries
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