Two major car makers are increasing the amount of nickel in electric batteries — which is good news for ASX-listed nickel stocks.

America’s General Motors and Japan’s Honda plan to collaborate on “advanced chemistry” batteries for electric cars that include more nickel according to earlier reports from Reuters.

The two car makers last night announced a deal under which GM will supply batteries to Honda — which is expected to reduce the cost of electric cars after 2020.

GM and Honda had “formed the industry’s first manufacturing joint venture to produce an advanced hydrogen fuel cell system in the 2020 timeframe” they said in a statement.

“The integrated development teams are working to deliver a more affordable commercial solution for fuel cell and hydrogen storage systems.”

More nickel means batteries can store and produce more energy.

>> Scroll down for a table of ASX-listed nickel stocks

The trade-off, however, is there will be less cobalt.

It has been widely reported that American car giant Tesla and Japanese battery maker Panasonic are phasing out the use of cobalt in their batteries – and it appears GM and Honda are also looking to also reduce their use of cobalt.

Cobalt players needn’t worry though – the commodity will still be needed in batteries to stop them blowing up, according to experts. Cobalt is a key ingredient in stabilising battery chemistry.

The aim of increasing the amount of nickel, meanwhile, is to cut the cost of the batteries.

General Motors reportedly wants to slash the current $10,000 to $12,000 price tag in half by 2021.

Investment bank UBS predicts electric cars could offer a “renaissance for the nickel market”.

Electric vehicle demand currently only accounts for about 3 per cent of nickel usage, or 70,000 tonnes.

UBS says EV battery manufacturing could drive incremental nickel demand up by as much as 40 per cent by 2025.

If EV production grows to around 16.5 million in the next seven years, an extra 300,000 to 900,000 tonnes of nickel would be needed each year depending on the battery chemistries used.

Tesla boss Elon Musk has even said himself: “Our cells should be called nickel-graphite, because primarily the cathode is nickel and the anode side is graphite with silicon oxide”.

Although China currently prefers a lithium, iron and phosphate cathode, UBS sees the Asian powerhouse switching to a nickel, manganese and cobalt cathode, which will also help drive demand for the base metal.

>>Here’s a recent table of ASX-listed nickel stocks (prices from March):

ASX Code Name 12-month price change Price Mar 29, 2018 (intraday) Price Mar 28, 2017 Market Cap ($M)
WSA WESTERN AREAS LT 0.364628820961 3.125 2.29 875.7
VMS VENTURE MINERALS 0.0689655172414 0.031 0.029 13.8
VRX VENTNOR RESOURCE Suspended 0.067 0.0162 16.8
TAS TASMAN RESOURCES -0.714285714286 0.06 0.21 25.6
SGQ ST GEORGE MINING 0.0689655172414 0.155 0.145 48.8
SPI SPITFIRE MATERIA 0.25 0.1 0.08 54.7
SAU SOUTHERN GOLD LT -0.155172413793 0.245 0.29 12.0
RIO RIO TINTO 0.213582512932 72.73 59.93 118.2 billion
RVR RED RIVER RESOUR 0.208333333333 0.29 0.24 137.2
RDM RED METAL -0.178571428571 0.115 0.14 23.1
POS POSEIDON NICKEL -0.0263157894737 0.037 0.038 40.7
PNN PEPINNINI LITHIU -0.0909090909091 0.029 0.0319 15.8
PEK PEAK RESOURCES L -0.545454545455 0.045 0.099 27.7
PAN PANORAMIC RESOUR 0.688218390805 0.47 0.2784 248.3
MGV MUSGRAVE MINERAL -0.247058823529 0.064 0.085 17.9
MCR MINCOR RESOURCES 0.521739130435 0.35 0.23 80.4
MEI METEORIC RESOURC 1.61538461538 0.034 0.013 20.5
MLX METALS X 0 0.715 0.715 459.0
MLM METALLICA MINRAL -0.150943396226 0.045 0.053 14.8
MAU MAGNETIC RESOURC 1.26666666667 0.17 0.075 23.0
LML LINCOLN MINERALS -0.105263157895 0.034 0.038 20.1
KOR KORAB RESOURCES 1.04347826087 0.047 0.023 14.1
KNL KIBARAN RESOURCE -0.297297297297 0.13 0.185 35.8
JRV JERVOIS MINING 6.31707317073 0.42 0.0574 86.6
IGO INDEPENDENCE GRP 0.301408450704 4.62 3.55 2.7 billion
IPT IMPACT MINERALS -0.434782608696 0.013 0.023 17.2
HIG HIGHLANDS PAC 0.328358208955 0.089 0.067 84.6
HNR HANNANS 0.307692307692 0.017 0.013 33.6
GTE GREAT WESTERN EX 0 0.016 0.016 15.6
CXX CRADLE RESOURCES -0.677419354839 0.1 0.31 18.5
CZN CORAZON MINING L -0.44 0.014 0.025 16.4
BHP BHP BILLITON 0.181171548117 28.23 23.9 146.5 billion
AVQ AXIOM MINING -0.233333333333 0.115 0.15 39.6
AUZ AUSTRALIAN MINES 4.39473684211 0.1025 0.019 267.8
AQD AUSQUEST 0.615384615385 0.021 0.013 11.0
ANW AUS TIN MINING L 1.11111111111 0.019 0.009 41.2
AKM ASPIRE MINING -0.585492227979 0.008 0.0193 17.7
AXE ARCHER EXPLORATI 0.666666666667 0.115 0.069 18.9
AOH ALTONA MINING LT -0.290322580645 0.11 0.155 59.1
ADY ADMIRALTY RESOUR 0 0.009 0.009 10.4