Amplify Lithium & Battery Technology ETF (BATT) 1st Quarter Commentary 2025
Amplify Lithium & Battery Technology ETF (BATT) seeks investment results that correspond generally to the EQM Lithium & Battery Technology Index. BATT is a portfolio of companies generating significant revenue from the development, production and use of lithium battery technology, including: 1) battery storage solutions, 2) battery metals & materials, and 3) electric vehicles (EV).
BATT returned -5.45% on a net asset value (NAV) compared to its underlying benchmark, the EQM Lithium & Battery Technology Index at -5.51% for the first quarter (Q1) 2025. For comparison, the Solactive Global Lithium Index declined 5.47%. View Standardized Performance
The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit AmplifyETFs.com/BATT. Brokerage commissions will reduce returns. NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The closing price is the last price at which the fund traded.
2024 Record Year for EV Sales on Lower Battery Material Prices
Despite a multitude of headwinds, 2024 was a record year for the global electric vehicle industry. In total, 865.5 GWh1 was added to the electric car industry, an expansion of 171.8 GWh representing annual growth of 25%. Nearly a third of all passenger EV vehicles on the road today were purchased last year in 2024.
EV batteries for plug-in and conventional hybrid vehicles contained a combined 1.76 million tonnes2 of battery materials such as graphite, LCE (lithium carbonate equivalent), nickel, cobalt, and manganese, outpacing growth estimates in GWh and unit terms. While all of this new demand seems like a positive for battery metal producers, battery material prices are well below their 2022 peak levels. In aggregate, the battery metals deployed in 2024 were worth a total of $14 billion USD, but that represents a 45% decline from price levels the year prior.
Battery Chemistry Mix Has Shifted to Lower Cost Model
Quite simply, China EVs are much cheaper in terms of battery metal usage and costs. BYD sold more than 2 million more EVs last year than Tesla, but using only half the material costs. BYD’s in-house manufactured batteries cost it $1.07 billion in 2024, down nearly half of what it cost them in 2023.
The reason for the lower cost is all about the battery chemistry. BYD’s model lineup of all lithium-iron-phosphate (LFP) battery vehicles was focused on the lower-priced end of the plug-in hybrid vehicle market. Its sales-weighted average material cost per EV was only $259 versus $1152 for every Tesla model sold.
Comparing BYD’s costs to other fully electric vehicle models, its spending on raw materials is still much less than the industry average, costing them $399 per EV as opposed to VW’s $1641 per vehicle costs. While LFP-powered Model 3’s and Model Y’s manufactured in China remain a big part of Tesla’s sales there, a slow buildout of LFP cell factories outside of China means that these nickel, cobalt, and manganese-free battery powerpacks remain largely absent from Western model lineups.
Taking the Lead from China
Clearly, keeping battery costs down is a key competitive advantage that will drive EV sales growth overall as has been the case in the world’s largest EV market, China. Even after a 20% reduction in cost from last year, GM’s average battery metals cost is $1702 per vehicle3 - not competitive. Three-quarters of its batteries come from Korean-manufacturer LG Energy Solutions, but it is reevaluating this business strategy. That is a situation that tariffs alone cannot resolve. Price parity with ICE vehicles will become paramount to EV growth, along with comparable features, range, and reliable charging infrastructure.
BATT's top contributors to performance in Q1 2025 were BYD (+47%), XPeng (+75%), and Leapmotor Technology Co (+54%)
Chinese EV makers rallied in the first quarter of 2025, thanks to strong domestic sales as Chinese drivers eschewed foreign brands ahead of US tariffs. Chinese automaker BYD released its results, revealing it is now making as much as Tesla. BYD announced4 it expects first-quarter net income of $1.2 billion to $1.4 billion, much better than the $820 million forecast by Wall Street, according to FactSet. XPeng also posted better-than-expected fourth quarter results and strong guidance. XPeng expects to deliver 91,000 to 93,0005 cars in the first quarter, up about 320% year over year. But price competition in the China market is fierce, with more EVs battling it out for market share. Leapmotor is another Chinese EV manufacturer benefiting from strong domestic demand, focused on a mainstream price range of 100-200k RMB and the successful C16 model. It has gone from a relative unknown to a formidable second-tier player6. It is expected to launch a budget-friendly model later this year, combining direct sales and a franchise model, and expanding to 800 stores.
Detractors from performance included Tesla (-36%), TDK Corp (-21%), and Ivanhoe Mines (-26%)
Tesla is losing market share in its largest market China as it fails to compete against its lower cost, domestic rivals. Tesla’s Q1 deliveries came in well below expectations and Wall Street has cut estimates. And as mentioned, EV competitor BYD has outsold7 Tesla during the past two quarters, a feat it accomplished without access to the U.S. market. And Elon Musk’s entry in politics has hurt global sales even further, with tariffs now added into the mix. Japanese battery-maker TDK rose last year on news about a new wearables AI battery and hopes for solid state, but sold off after reporting lackluster results8 for its latest quarter. Copper producer Ivanhoe Mines reported results9 and copper guidance that fell short of expectations. Its forward revenue guidance included a significant increase in projected capex, citing power constraints and the possible delay of a smelter ramp-up as production headwinds.
Visit the BATT fund page for more information, including fact sheets, index methodology, and regulatory documents.
Index Definitions: An index is unmanaged and it’s not possible to invest directly in an index. The EQM Lithium & Battery Technology Index (BATTIDX) seeks to provide exposure to global companies associated the development and production of lithium battery technology and/or battery storage solutions; the exploration, production, development, processing, and/or recycling of the materials and metals used in lithium battery chemistries such as Lithium, Cobalt, Nickel, Manganese, Vanadium and/or Graphite; and/or the development and production of electric vehicles. The Solactive Global Lithium Index tracks the performance of the largest and most liquid listed companies active in exploration and/or mining of Lithium or the production of Lithium batteries. The index is calculated as a total return index in USD and adjusted semi-annually.
1https://www.mining.com/chart-top-20-automakers-by-battery-metal-spending/
2https://www.mining.com/chart-top-20-automakers-by-battery-metal-spending/
3https://www.mining.com/chart-top-20-automakers-by-battery-metal-spending/
4https://www.barrons.com/articles/tesla-stock-ev-byd-c8242e4f
5https://www.barrons.com/articles/xpeng-earnings-ev-stock-price-a0a6cae8
6https://autonews.gasgoo.com/m/70035591.html
7https://www.thestreet.com/technology/elon-musk-gets-more-bad-china-news
8https://simplywall.st/stocks/jp/tech/tse-6762/tdk-shares/news/tdk-corporation-tse6762-just-released-its-third-quarter-earn
9https://www.investing.com/news/stock-market-news/ivanhoe-mines-stock-falls-following-lowered-production-and-raised-capex-guidance-93CH-3803306
Fund inception date: 6/6/2018. THNR’s expense ratio is 0.59%. The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit AmplifyETFs.com/BATT. Brokerage commissions will reduce returns. NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The closing price is the last price at which the fund traded.
You could lose money by investing in the Fund. There can be no assurance that the Fund's investment objectives will be achieved. The Fund is not actively managed. The Fund invests in securities included in its Index regardless of their investment merit. Narrowly focused investments typically exhibit higher volatility. A portfolio concentrated in a single industry, such as lithium battery technology, makes it vulnerable to factors affecting the companies.
The Fund may face more risks than if it were diversified broadly over numerous industries or sectors. The Fund has become more susceptible to potential operational risks through breaches in cybersecurity. The Fund invests in securities that are issued by and/or have exposure to, companies primarily involved in the metals and mining industry. Investments in metals and mining companies may be speculative and subject to greater price volatility than investments in other types of companies. The exploration and development of metals involves significant financial risks over a significant period of time, which even a combination of careful evaluation, experience and knowledge may not eliminate. Rare earth metals have more specialized uses and are often more difficult to extract. The increased demand for these metals has strained supply, which could adversely affect the companies in the Fund’s portfolio. Some of the companies in which the Fund will invest are engaged in other lines of business unrelated to the mining, refining and/or manufacturing of metals and these lines of business could adversely affect their operating results.
The Fund’s assets are concentrated in the materials sector, which means the Fund will be more affected by the performance of the materials sector than a fund that is more diversified. The Fund currently has fewer assets than larger funds, and like other relatively new funds, large inflows and outflows may impact the Fund’s market exposure for limited periods of time. The Fund will invest in the securities of non-U.S. companies. Investments in emerging market issuers are subject to a greater risk of loss than investments in issuers located or operating in more developed markets. The mining, refining and/or manufacturing of metals may be significantly affected by regulatory action and changes in governments. Small and/or mid-capitalization companies may be more vulnerable to adverse general market or economic developments. Electric vehicle technology is relatively new and is subject to risks associated with a developing industry.
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained by calling 855-267-3837 or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
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