It was an eventful week for the EV market as it marked what could be the launch of the only real competition to the Tesla ($TSLA) Model S in ten years since it’s launch in 2009: the Porsche Taycan. Not swaying from the iconic brands design cues, the Taycan has performance numbers and a price tag that will rival the Model S but will undoubtedly capture the heart of die hard petrol enthusiasts.

The Taycan marks the crown jewel for Volkswagen ($VOW3) who has spent $33 billion over the last few years in an effort to push in to the EV market and unseat EV pioneer Tesla. This is not the first offering from VW in the e-car market as both the Audi and VW brands have offerings already but it is the moment where the largest global car company has come out and told everyone that they will too conquer the e-car market.

Based on EIA estimates, electric car deployment has been growing rapidly over the past ten years, with the global stock of electric passenger cars passing 5 million in 2018, an increase of 63% from the previous year. If EV sales account for 30% of all vehicle sales by 2030, it is estimated by the EIA that translates to 44 million vehicles per year. VW has stated that their target share of electric vehicles is to account for at least 40% of total sales by 2030.

The Taycan “is a turning point for Porsche and the industry as it raises the technical bar for electric vehicles beyond Tesla,” Bloomberg Intelligence analyst Michael Dean wrote in a report. The Taycan should “be profitable from launch given Porsche’s proven pricing power, albeit at vastly reduced margins as compared with gas-powered models.”

On Twitter, Tesla CEO Elon Musk (@elonusk) seems to have downplayed the Taycan launch tweeting “Um @Porsche, this word Turbo does not mean what you think it does” and then running Model S test in Porsches backyard by tweeting “Model S on Nürburgring next week”. This seems like healthy competition.

These developments in the EV market are fantastic for humanity but are going to create some great demand but pressure on the markets for the input materials necessary to produce the new generation of vehicles, notably Silicon. As it stands, 10% of a Tesla is chassis is Silicon. Silicon is also being tested in next generation batteries to replace graphite and boost capacity by 10x or 1,000% and although not commercialized it is well publicized that silicon could replace graphite anodes in Lithium batteries.

Presently, Silicon content in lithium-ion battery anodes is roughly 6% and is estimated to represent an addressable market value of US $ 1B by 2022. If Silicon replaces other materials in batteries, this new addressable market will grow exponentially. The problem today is that the global production of silicon is not profitable and operations across the globe, including low cost Chinese producers are shutting down.

Very simply put, demand is rising, supply is contracting and prices will skyrocket. If prices of key input materials for EVs rise, the costs will either be borne by the manufacturers who will be unwilling to book a loss for very long and kill the program or the consumer who will likely not want to pay a premium for moral high ground and just purchase a good old gas engine. Either way, market dynamics will prevail.

One of the only solutions to the forthcoming supply crunch of the global silicon upstream market and potentially the key to profitability for Tesla, VW and the entire EVs segment is HPQ Silicon ($HPQ.CA). This little known company recently stated that their PUREVAP™ QRR technology may reduce raw material cost by 50%, representing a direct 20% reduction in OPEX and may reduce manufacturing CAPEX by 90% or more versus all other manufacturers.

In order to secure their competitive edge, HPQ recently filed a second patent covering the one step production of Silicon in a plasma arc furnace under vacuum. HPQ is now ready to solve the real-world challenges facing Silicon markets, completely revolutionize the industry and prepare for the forthcoming revolution in the automotive and battery markets.

In the coming months we would expect a lot of news and developments surrounding the EV market, battery technology and HPQ. It seems completely realistic to us that if HPQ has some sort of Holy Grail, the crusading knights will be knocking promptly.

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