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Glencore’s Views on the Vehicle Electrification Story

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Vehicle electrification

Vehicle electrification has been the most happening story in global automotive markets. The global shift to electric vehicles, backed by several governments across the world, has led automakers including General Motors (GM) and Ford (F) to announce new lines of EVs (electric vehicles). In this part, we’ll see how Glencore (GLEN-L) is playing the vehicle electrification story (TSLA).

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Disruption?

During Glencore’s investor update call, Ivan Glasenberg, Glencore’s CEO, said, “It’s pretty evident now, electric vehicles will be disruptive to the world.” The company sees EVs accounting for more than 30% of total vehicle production in 2030. The predictions, like others that Glencore noted during the event, are based on the findings of a model that CRU commissioned for Glencore. Looking at absolute numbers, EV production could hit more than 31 million units in 2030. BHP Billiton (BHP), the world’s largest miner, sees the global EV fleet growing to 140 million by 2035. Currently, there are only about 1 million EVs globally.

Commodities

Copper, lead, cobalt, nickel, and lithium are among the commodities that could benefit from vehicle electrification. On the other hand, platinum and palladium demand could come under pressure since they’re used in diesel and gasoline-powered vehicles, respectively. However, platinum could still see fresh demand from hydrogen fuel cell vehicles. Glencore also sees zinc and thermal coal demand going up as a result of vehicle electrification. Looking at Glencore’s portfolio, it’s the leading cobalt and zinc producer. It’s among the top five copper miners.

Next, we’ll see how Glencore sees higher EV adoption impacting metal demand.

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