High Voltage: Electric vehicles are about to get cheaper for Aussies. Here’s one way investors can cash in
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
Electric cars will be up to $2000 cheaper for Aussies – and up to $9000 cheaper for companies that run fleets – under new legislation set to pass Federal parliament.
Once enacted, the Treasury Laws Amendment (Electric Car Discount) Bill 2022 will remove fringe benefits tax (FBT) to make electric cars cheaper, with a preference for full EVs.
Plug-in hybrids will be phased out of the program by April 2025.
It will cost an estimated $4.5bn of budget cash out to 2033.
The policy means Australia joins several other countries in enacting new incentives to help speed up the uptake of EVs, says Cameron Gleeson, senior investment strategist at BetaShares.
“The data shows that countries which have been more supportive of electric vehicles, like Norway and China, have also seen far greater adoption of electric vehicles,” he says.
“While recent data showed electric vehicles represented 3.39% of all car sales in Australia this year, in contrast, global leader Norway stands at around 84% and China sits at around 24%.”
This trend will create winners and losers, both within the vehicle manufacturers themselves and amongst the different component makers within the automotive industry supply chains, Gleeson says.
“For Australian investors the growth potential and shifts within the industry represent a compelling long-term investment opportunity,” he says.
“While it’s good news for Tesla and other well-known manufacturers in the short-term, the trend towards vehicles of this type will play out over the decades to come.
“Over the longer-term period, it’s difficult to pick individual winners, so investors should strongly consider ways to reduce company specific risk and look to invest in a portfolio of manufacturers that are at the forefront of the move towards electric vehicles.”
According to Bloomberg data, there are 65 ETFs in the electric and autonomous vehicle category globally holding nearly US$6.8 billion in funds under management.
Some of the top holdings in BetaShares’ Electric Vehicles and Future Mobility ETF (ASX:DRIV) include electric vehicle manufacturers Tesla, BYD and Volkswagen, as well as Aptiv and Infineon who make the technology, electronics and components required for electric and autonomous vehicles.
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium is performing>>>
Battery metals stocks missing from our list? Shoot a mail to [email protected].
The recent rare earths standout is embarking on drilling an alkaline igneous intrusion at North Stanmore – referred by industry experts as “engine rooms for rare earth elements and critical metals”.
This hard rock target is separate, but potentially related to the high grade clay-hosted discovery 1km away announced earlier last week.
“Victory’s technical team believe that the company’s ionic clay rare earth discovery to the south is likely to be related to the alkaline intrusion as geochemical data from the initial diamond hole has confirmed similar ratios of HREE/TREE,” it says.
This three-hole drilling program will kick off immediately, 1VG says.
Meanwhile, an ongoing 10,000m drilling program is going well, with initial XRF testing indicating “potential for a large ionic clay REE footprint around the North Stanmore alkaline intrusion”.
WR1 has been a red-hot standout over the past month, up almost 200% on a steady flow of good news out of its suite of Canadian lithium projects.
Last week it made plans to raise $6.8m at $1.67 a share – an unprecedented 98% premium to the last closing price.
It will be raised using so-called ‘flow-through shares’ provisions under Canadian tax law. The shares will be immediately on-sold through a block trade agreement “to select high-quality domestic and offshore institutional investors”.
WR1 says flow-through provisions enables it to significantly minimise dilution while ramping up exploration programs at its Cancet and Adina projects.
“It allows us to raise capital at a premium price without the level of dilution that would occur via a standard, share placement offer,” managing director Chris Evans says.
“It also allows Winsome to facilitate the introduction of select high-quality institutional investors to the company’s share register.
“The funds raised will enable us to continue the exploration work at Cancet and Adina without delay, strengthen cash reserves and work towards our intention to announce maiden resources next year.”
WR1 caught a rocket after announcing a “significant pegmatite intercept” late October at the Adina lithium project in Canada.
All up, 160m of pegmatite was intercepted in drilling below the recently discovered, well mineralised Jamar outcrop, it said late October.
A 12,000m drilling program currently underway will culminate in a maiden resource at the Adina and Cancet projects in 2023.