Group 1: General Information - Report Date: May 28, 2025 [2] - Report Type: Nickel Daily Report [1] - Research Team: Nonferrous Metals Research Team [3] - Researchers: Yu Feifei, Zhang Ping, Peng Jinglin [3] Group 2: Market Review and Operational Suggestions - Nickel Price Movement: On the 27th, nickel prices continued to trade in a narrow range. The main contract 2506 hit a low of 122,000, a half - month low, and closed at 122,170, down 0.55%. The total open interest of the index increased by 7,419 to 176,178 lots [9] - Spot Premium: The spot premium remained generally stable. The Jinchuan premium was 2,200 yuan/ton, and the Russian nickel premium was 250 yuan/ton [9] - Nickel Ore: The premium of Indonesian nickel ore this week remained stable at $26 - 28 per wet ton. The decline of the new round of Indonesian domestic trade nickel ore HPM was slight, and the current negotiation premium was still strong. It is expected that the price of Indonesian ore will be prone to rise and difficult to fall [9] - LME Inventory: LME nickel inventory increased by 1,362 tons on the 27th, with the main increase of 1,482 tons coming from the Busan warehouse. The increase in inventory put downward pressure on prices [9] - Battery - grade Nickel Sulfate: The average price of battery - grade nickel sulfate remained flat at 28,015 yuan. Next week is a traditional procurement node. With the expected improvement in market demand in June and cost support, nickel salt prices are expected to rise [9] - Overall Outlook: Recently, the prices of nickel - related products in the industrial chain have weakened slightly but with limited room. Nickel prices continued to consolidate. In addition, the subsequent supplementary quota of RKAB is expected to start the approval process in June, and there are still concerns. Wait for low - buying opportunities [9] Group 3: Industry News - Indonesian Domestic Trade Ore Benchmark Price: SMM expects the Indonesian domestic trade ore HPM to remain stable with a slight decline in the first half of June, down 0.06% from the previous period. The HMA in the first half of June is $15,405 per ton, down $10 per ton. The HPM prices of different - grade nickel ores are expected to decline slightly compared with the second half of May. SMM expects the premium in June to be difficult to rise and may remain stable at the May level [10][11] - Battery Energy Storage Projects: - Bulgaria officially launched the largest - scale operating battery energy storage system in the EU, with a capacity of 124 MW/496.2 MWh [11] - Renewable energy storage company Apatura has obtained planning permission for a 100 - MW battery energy storage system project in Scotland, increasing its approved total energy storage capacity to over 1.6 GW [11][12] - Solar Cell Innovation: A research team in Turkey developed a TOPCon solar cell using nickel (Ni) contact with almost no silver (Ag), significantly reducing silver usage while maintaining high efficiency [11]

Industry Information - During the "May Day" holiday, over 80 cities in China hosted nearly 100 auto shows, with smart and new energy vehicles becoming the main drivers of consumption, as sales of new energy vehicles exceeded 60% in many locations [9][10] - Continental Group and Horizon's joint venture, Zhijia Continental, launched the Astra and Luna driver assistance systems, securing multiple mass production orders from leading automakers [9][10] - NVIDIA is developing a new AI chip compliant with U.S. export regulations to maintain its market share in China, with samples expected for testing by June [11] - Uber partnered with Momenta to deploy autonomous taxis in Europe by early 2026 [11] - The U.S. imposed a 25% tariff on key automotive parts, which Japan strongly opposes [12] - Waymo announced its autonomous taxi fleet has surpassed 1,500 vehicles, with plans to produce 2,000 more in Arizona [12][13] - Pony.ai and Uber will integrate their Robotaxi services on the Uber platform in the Middle East, expanding to 15 cities internationally [13][14] - The European Parliament approved relaxed carbon emission rules for automakers, allowing more time for compliance [14] - CATL launched a 9MWh super-capacity energy storage system, TENER Stack, which improves energy density and reduces construction costs [19][20] - The automotive import and export total for March increased by 32.1% month-on-month, with exports growing by 38.9% [19] Policy Information - Jiangsu Province announced a new pricing structure for industrial electricity to promote renewable energy consumption and reduce costs for businesses [3][32] - Guangdong's Nanao County issued interim measures for managing new energy vehicle charging and swapping infrastructure [4][33] - Beijing set standards for electric vehicle battery swapping times, with passenger vehicles limited to 4 minutes and commercial vehicles to 5 minutes [34] - Sichuan Province will implement regulations for the recycling and utilization of used power batteries starting June 1 [36] - The Ministry of Industry and Information Technology is proposing new safety standards for electric vehicle door handles [40] Company Information - Avita's global R&D center has been inaugurated, facilitating collaboration with Huawei on new product development [43] - Xiaomi has renamed its "smart driving" features to "assisted driving" in response to national standards [45] - NIO delivered its 700,000th vehicle at its Wuhan research facility [6]

Financial Data and Key Metrics Changes - The company reported approximately $432 million in revenue for Q2 2025, exceeding expectations due to faster project milestone achievements [9][30] - Adjusted gross profit was $45 million, resulting in an adjusted gross profit margin of approximately 10.4%, marking the seventh consecutive quarter of double-digit margins [30] - Annual recurring revenue (ARR) increased to $110 million, with a revised guidance for ARR of $145 million [9][32] Business Line Data and Key Metrics Changes - The backlog at the end of the quarter was approximately $4.9 billion, including $200 million in contracts added during the quarter [9][20] - The company anticipates a strong ramp-up in order volume, particularly in Australia, as it enters the second half of the fiscal year [9][10] Market Data and Key Metrics Changes - The U.S. electricity demand is projected to grow by 11% through 2030, indicating a significant increase in annual energy storage capacity [14] - Battery storage capacity in Australia is expected to reach 51 gigawatt hours by February 2030, up from 7 gigawatt hours in 2024 [15] Company Strategy and Development Direction - The company is focused on its SmartStack technology and U.S. domestic content strategy to create value for stakeholders [21][22] - The domestic content strategy aims to meet local manufacturing requirements under the Inflation Reduction Act (IRA), providing tariff incentives and creating jobs [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth prospects for energy storage despite current tariff-related uncertainties [11][39] - The company believes that the high tariff levels on Chinese imports are unlikely to be sustainable and expects a return to normalized contracting activity in the U.S. market [12][39] Other Important Information - The company ended the quarter with over $1 billion in liquidity, including $610 million in cash, providing a strong financial foundation [10][32] - The revised guidance for fiscal 2025 reflects a lower revenue expectation due to tariff impacts, with a midpoint guidance of $2.7 billion [34][36] Q&A Session Summary Question: Clarification on AESC ramp and capacity - Management clarified that the Tennessee facility has two lines, each with a capacity of 3 to 3.5 gigawatt hours, allowing for a combined annualized run rate of 12 gigawatt hours through a mix of domestic and imported batteries [45][48] Question: Mix of contracts in pause state - Approximately half of the $700 million in paused contracts were already in backlog, while the other half were under advanced negotiations [97][98] Question: Domestic content strategy and customer willingness - Management indicated that customers are hesitant to commit to fully domestic offerings due to uncertainty around future tariff negotiations with China [109][111] Question: Competitive landscape and tariff impacts - The competitive landscape remains intense, with management noting that uncertainty has made it difficult to gauge competition levels [70][71] Question: Global alternative cell supply situation - Management acknowledged that while there is some production outside of China, the majority of cell production still comes from China, making diversification challenging [76][78]

Group 1 - The competition between Chinese and South Korean companies in the battery sector is expanding from electric vehicles to energy storage systems (ESS) due to the rising demand for renewable energy and data centers [1] - ESS helps stabilize the power grid by providing backup power, especially as the demand for clean technologies and AI-related hardware increases [1] - The share of energy storage batteries in the global battery market has increased from 5% in 2020 to 20%, with predictions of more than doubling by 2030 [1] Group 2 - Chinese energy storage batteries account for nearly 90% of the global ESS installed capacity, with over 80% market share in the US and over 75% in Europe [2] - Following the imposition of tariffs in the US, South Korean battery companies see an opportunity to regain market share, with LG Energy focusing on cost-effective lithium iron phosphate batteries for the US market [2] - The different trajectories of Chinese and South Korean energy storage companies illustrate a "tale of two battery markets" [2] Group 3 - In 2022, China exported lithium-ion batteries worth $15.3 billion to the US, widening the market share gap with competitors like South Korea [3] - Chinese lithium iron phosphate batteries are favored in the US for their competitive pricing and cost-effectiveness, particularly for data centers [3] - Despite high tariffs, Chinese exporters may withstand costs due to existing advantages, while South Korean manufacturers have yet to prove their ability to competitively produce lithium iron phosphate batteries at scale [3]