Amplify Lithium & Battery Technology ETF (BATT) 4th Quarter Commentary 2024
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 -6.61% on a net asset value (NAV) compared to its underlying benchmark, the EQM Lithium & Battery Technology Index at -7.10% for the fourth quarter (Q4) 2024. For comparison, the Solactive Global Lithium Index declined 6.6%. View Standardized Performance
Record Year for EV Sales, But Tesl Sales Declined
2024 marked a record year for U.S. EV sales, landing at 1.3 million up from 1.2 million last year. Despite declining sales from Tesla, legacy automakers are successfully shifting to electric and hybrid vehicles. Meanwhile, Tesla reported its first-ever full-year sales drop in its history as a public company, thanks to increased competition and lower demand for all-electric vehicles.
Even though global deliveries fell for the first time, Tesla’s China sales rose 8.8% to a record high of more than 657k cars in 2024. In 2024, Tesla delivered 36.7% of its cars to customers in China, its second-largest market, based on the sales figures. Reduced European subsidies, a U.S. shift toward lower-priced hybrid vehicles, and tougher global competition, especially from China's BYD Company Limited (BYD), were a drag on sales.
Electric Dreams Turn into Battery Metals NightmarePrices of lithium, nickel, and cobalt collapsed in 2023 and have continued grinding steadily lower over the course of 2024. A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve. This is also a story of massive oversupply with too much new capacity brought online at exactly the wrong time. And it will be supply discipline that will determine whether there will be any price recovery in 2025.
China is still the main driver of the EV revolution, with Western markets struggling to build momentum. Western consumers still need an incentive to make the switch from internal combustion engine to electric motor. German new-energy vehicle sales have slumped this year after subsidies were abruptly removed at the end of 2023.
In addition, many EV buyers, particularly those in the critical Chinese market, are opting for hybrids or plug-in hybrids over battery electric vehicles. These have batteries about a third of the size of those used in pure battery models, meaning a similar-sized reduction in all the metallic cathode inputs.
Solid-State Battery Coming Online in 2025 Could Be Positive Catalyst
The solid-state battery is a novel technology that has a higher specific energy density than conventional batteries. This is possible by replacing the conventional liquid electrolyte inside batteries with a solid electrolyte to bring more benefits and safety. Japanese automaker Honda shocked the automotive world when it announced that it would actually begin producing solid-state EV batteries in January 2025. Other automakers are expected to follow suit.
BATT's top contributors to performance in Q4 were Tesla (+54%), Bloom Energy (+110%), and Advanced Energy Solutions (+120%)
Tesla shares rallied in Q4 despite lackluster delivery data, with the company experiencing its first ever annual decline in deliveries. But a second Trump term is viewed as a positive for Tesla, especially given Elon Musk’s heavy involvement in the administration. Bloom Energy shares rallied along with other hydrogen fuel cell stocks as new regulatory rules appear favorable for hydrogen. Taiwan-based lithium battery manufacturer Advanced Energy Solution Holding Co. had shares rise after rising estimates and price targets on new business expansion.
Detractors from performance included BHP Group (-23%), Samsung SDI (-42%), and Ecopro Materials (56.6%)
Nickel-producer BHP’s shares declined in Q4 due to downward estimates related to weak commodity prices. Battery-maker Samsung SDI shares fell to their lowest level in four years. In 2024, the dominance of Korea's top-three battery makers continued its prolonged decline, with their combined share of the global EV market having fallen below 20 percent. Investors also dumped their shares in Korean EV battery firms, amid growing fears about the possibility that those companies could bear heavier costs to avoid U.S. tariffs. Korean battery materials subsidiary EcoPro Materials traded down in sympathy, as well as Samsung SDI’s cathode supplier. EcoPro also blamed “declining raw materials prices and slowdown of EV sales,” for the poor performance.
Visit the BATT fund page for more information, including fact sheets, index methodology, and regulatory documents.
Index Definition: 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.
Carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Fund’s statutory and summary prospectuses, which may be obtained at AmplifyETFs.com. Read the prospectus carefully before investing.
Fund inception date: 6/6/2018. Total 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.
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.
Amplify Investments LLC serves as the investment adviser to the Fund. Penserra Capital Management LLC serves as investment sub-adviser to the Fund. Amplify ETFs are distributed by Foreside Fund Services, LLC.
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.
Amplify ETFs are distributed by Foreside Fund Services, LLC.