China xEV Battery Value Chain Electrolyte: The Golden Age of Chinese Electrolyte Suppliers
Chinese electrolyte players could reach 87% of global market share by 2025 (vs 69% in 2020), based on our estimate.
We believe a combination of three macro factors creates a golden opportunity for Chinese electrolyte players to increase their global footprint:
Fast response to accelerated demand with ambitious capacity expansion
Cost advantage from localisation of supply chain
Partnerships with global leading Li-ion battery makers
Positioning in the value chain is key to a winning strategy. We estimate solute LiPF6 and solvent prices, as well as electrolyte prices, will remain high for some time. As new capacities come online, LiPF6 electrolyte and solvent prices could retreat from current elevated levels. We prefer leading electrolyte players with vertical integrated supply chains, as they can benefit from long-term demand growth and from near-term price increases, while their cost advantage from vertical integration also enables them to be more defensive in a price downcycle.
With rising crime, increased scrutiny is falling on police response. Given recent impacts from heavily publicized events, staffing challenges at police departments, and increased public safety spending via state/municipal/federal sources, technology-enabled solutions have strong potential to improve public safety.
Restaurants are looking to maximise profits by running operationally efficient kitchens and generating new revenue streams. Delivery-enabled profit maximising techniques and asset sweating struggle to cohabit alongside traditional kitchen operations.
Inflation is expected to be a prominent theme for the group this year, as Utilities pass most costs through to customers, offering an inflationary hedge to investors. Monitoring customer bill inflation is vital in the current backdrop. Large-cap Utilities with multi-state jurisdictions and with exposure to commodities face less project risk than smaller regional peers.