TOTAL SE (TOT - Free Report) announced that it has signed an agreement with Groupe PSA to create Automotive Cells Company (“ACC”), with an objective of developing high-quality batteries to support the usage of higher number of electric vehicles (EVs).
At present, both the companies are concentrating on developing new high-performance lithium-ion technologies through research and development activities, as well as aiming to manufacture higher-performance batteries for the automotive industry from 2023.
Global Electric Vehicle Usage
The pandemic temporarily impacted the addition and usage of electric vehicles due to decreasing demand on account of coronavirus-induced lockdown and lower prices of hydrocarbons across the globe. However, the process of unlocking economic activities has already started across the globe and the demand for electric vehicles is returning back on track.
Per a release from Markets and Markets, the electric vehicle market is expected to expand at a CAGR of 21.1% over the 2019-2030 time period, which will push the total electric vehicle count to 26,951,318 units by 2030 from 3,269,671 units in 2019.
In the European market, the growth in battery demand for electric vehicles is expected to be 400 GWh by 2030, i.e. 15 times the current market. So, it is quite evident from the above forecasts that there is going to be a huge demand for EV batteries. ACC will set up two factories — one in France and another one in Germany — to produce high-quality batteries having an initial capacity of 8 GWh, reaching a cumulative capacity of 48 GWh on both sites by 2030.
Benefits of Electric Vehicles
It is evident from the above prediction that the popularity of EVs is increasing across the globe and automobile manufacturers are trying to launch EVs to cater to rising demand. The biggest advantage of the usage of EVs is a drop in emission levels. High-quality lithium-ion batteries are a game changer and are making EVs cost effective than conventional fuel vehicles.
We can see companies like Tesla Inc. (TSLA - Free Report) , Energizer Holdings Inc. (ENR - Free Report) and Panasonic Corporation (PCRFY - Free Report) , among others, actively producing batteries for EVs.
In the quarter-to-date period, TOTAL’s shares have outperformed the industry.
TOTAL currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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