Thursday, 27 August 2015

Joe Lowry: Drama In The Atacama Desert - SQM, Chile And Lithium For Tesla Gigafactory.

Joe Lowry continues his brilliant insights into the very opaque lithium maket space. Today he is covering the ongoing drama with SQM in the Atacama desert, which can affect Elon Musk with Tesla Gigafactory, which is growing up very fas tnow into the largest production facility in the world in the middle of Nevada desert.

Lithium Race In "War On Pollution": Investors Swarming Lithium Battery Market In China.

I continue to map the fast changing landscape for Lithium Battery business. Today we can start to add more Megafactories to the list. Tesla Gigafactory is being chased not only by Warren Buffet with BYD, but other well established players that we have discussed before: LG Chem, BYD, Foxconn, Boston Power and A123. Today we can start to dig out 17 new players in lithium battery space. I think that in the end we will have very similar situation to the Solar Panels - lithium batteries will become a commodity and price will drop dramatically. For my personal Holy Grail we need $100 per kWh - it will bring us my magic 20/200: $20k electric car with 200 miles range.

In the end we will have the overcapacity built and consolidation in the lithium battery space, but for now: the more - the better! State-level government policy to build new strategic industry: electric cars, brings its fruits already and new stimulus money which are fighting stock market collapse are sipping in the incredibly high growth lithium space.

The best players will be rising faster with this tide and Ganfeng Lithium is very well positioned for this growth. Ganfeng is building vertically integrated lithium business with International Lithium as strategic partner to develop the secure supply of lithium. Ganfeng newly built facility with 6,000 t/y of Lithium Hydroxide capacity is ready to supply this rapidly growing demand for high purity battery grade lithium. China now controls 75% of Lithium Hydroxide battery grade production facilities in the world. Prices are already going up even before all these Gigafactories will be coming on-line. Joe Lowry will be your best guide into the building shortages in the lithium market and a lot of broken dreams and promises in this industry. He forecasts the dramatic 150% rise in Lithium Demand over next 10 years and Apple Electric iCar is not even accounted for!
Ganfeng has bought a small Chinese mobile lithium battery maker last year and has secured 10% stake in revamped Boston Power, which is building its own Megafactory in China now. Check out our latest news from both J/V projects of International Lithium financed by Ganfeng in Argentina and Ireland.

"War on Pollution" and state-level plan are driving this incredible advance in technological leap into post carbon world by China now. Leapfrog into EV space mass production is happening already. Not a lot of people realise that Warren Buffet is one of the major players now in China with his BYD investment and Elon Musk talks Tesla production in China while building Superchargers Network. It will charge the mass market with Tesla Model 3 rolling out in 2018. Apple iCar will change our landscape overnight and connection with Foxconn can be a very interesting twist to the whole story. Ganfeng Lithium already supplies LG Chem, BYD, Boston Power and Panasonic which supplies cells to Tesla Motors and investing in Tesla Gigafactory. International Lithium new aggressive stage of development will bring us closer to potential production for this well established top lithium materials producer in the world.

Joe Lowry - Lithium Supply & Demand: Origins, Growth and Investment.

Joe Lowry has published another brilliant piece on the state of lithium industry, exploding demand and very sober outlook for the supply side. Joe brings more than twenty years of deep inside technical knowledge in this very opaque market place and knows almost all major lithium producers by "kicking all the tires" of their field operations. Lithium race is upon us and President Obama opens the new chapter for the sustainable clean economy. Where lithium will come from?

International Lithium Corp. Reports on Continuing Work in Argentina and Ireland With Ganfeng Lithium.

Mr. Kirill Klip, President, International Lithium Corp. comments, "Our projects are advancing in tandem with rising lithium prices. The lithium supply chain is being stressed even before the commissioning of the Tesla Gigafactory and other megafactories from BYD, Foxconn, Boston Power and LG Chem. Our joint ventures with Ganfeng Lithium demonstrate that cooperation between companies with varying expertise in the raw materials supply chain can work to secure a supply of strategic commodities. In this case, lithium which is necessary for the clean energy initiatives announced by the U.S. and China. These two countries alone will provide mass markets for electric cars and home energy storage units increasing the demand for lithium batteries."

Joe Lowry:

SQM - down but (hopefully...) not out in the Atacama

SQM's earnings release for the first six months of the year was earlier this week. I will focus on their lithium results rather than the entire business; however it is hard to write about the company without first mentioning the myriad of problems they currently face - from the scandal that forced the firing of the CEO to the lawsuit with CORFO and the uncertainty surrounding their lithium concession. Times are tough for SQM. The number of distractions clearly has had a negative impact on the overall business.

After reading the earnings press release this morning I felt compelled to Tweet the following:

Focusing on lithium results, it is hard to understand why SQM continues to produce so far below their stated annual capacity of 48K MT of lithium carbonate. Despite a shortage in the market, SQM's volume was down June YTD vs the prior year period:

Like their neighbors on the Atacama (ALB) SQM talks about growing demand and rising prices - so why are they producing so far below capacity? Certainly rain in the Atacama and a brief port strike does not fully explain the low sales volume - 17.6 MT of LCE in the first half. The implied half year capacity utilization is less than 75% at a time when global demand is beginning to strain global supply.

The global supply gap currently has to be filled by high cost capacity in China. SQM has long said they "reinject more lithium back into their salar each year than the world uses". Really? Why not at least produce your stated capacity when your cash cost is less than half your "Middle Kingdom" competitors?

So what is the problem in the Atacama? I am not completely certain of the answer - it is likely a combination of factors but I believe there are more than climatic, political and legal issues involved. For the past couple of years there have been rumors about changes in the impurity profile of the brine and resulting processing issues which seem to have lowered effective capacity substantially. I have personally had calls from Asia asking me if I knew why SQM was having a difficult time delivering product on time. I didn't have a good answer to an excellent question.

Despite lower volumes, higher pricing enabled the lithium business to provide approximately $30 million of gross margin on $100 million in sales from January to June. SQM only participates in a narrow range of lithium product lines - lithium carbonate and low end hydroxide on a global basis and a niche business of selling partially treated lithium chloride brine solution to Ganfeng Lithium in China as a feedstock. Their limited focus is a good strategy for them in my opinion.

Put in perspective vs a "Big 3" competitor, SQM had similar lithium sales revenue compared to FMC in the first half of this year. SQM's $100 million was $10 million less than FMC yet SQM's margin performance was ~$20 million higher than FMC's ~$10 million half year EBIT.

SQM's new CEO Patricio de Solminihac has been with the company for many years. He is the most experienced and, in my opinion, the most knowledgeable lithium executive among the "Big 3" lithium producers. I first met Mr. de Solminihac in 1997. Over the years, I have watched him out outplay his main competitors on a consistent basis.

Assuming the powerful forces that seek to break-up SQM don't succeed, I like SQM's long term potential in lithium and their other businesses. Despite the stated concerns about their recent lithium production performance, I think SQM is an undervalued asset. Lithium is a small part of their portfolio. It is not my role to give investment advice but in the interest of full disclosure, I am an actively buying the stock especially at prices below $15.¨

Monday, 24 August 2015

Lithium Race: Electric Cars Sales Are Going Exponential.

Growth in sales of electric cars is going exponential and we are fast approaching the mile-stone with one million EVs sold sometime in September of this year. We need more and better electric cars and, finally, they are coming. Tesla Model S is entertaining all tech crowd with its Ludicrous Mode, Tesla Model X will start breaking hearts of Range Rover squad. Apple Electric iCar will bring us all The iPod moment with electric cars taking off into the mass market stage overnight.

New catalyst will come with GM Bolt in production next year, Tesla Model S being unveiled in March in Geneva and new Nissan Leaf with 500 km range. Noise from Audi about Electric SUV with 500 km range in 2018 and Electric Aston Martin with 200 miles range is helping the general feeling of Lithium Rush in the air.

Warren Buffett's BYD is making solid progress in sales and China promises to become the top workld market for EVs if not this year than next for sure. Tesla has got the best selling EV title in June and BYD has made it to the top three best selling EVs in the same month. BMW, Mercedes, Renault all are pumping up production of EVs and Europe has taken number one EV Sales spot with China growing very fast. China is the separate story and "War on Pollution" has produced numerous contestants for the government cash including Internet TV and E-Commerce giants moving into the space.

The results remain to be seen, but serious players are moving fast now in EV and Lithium Battery race with BYD, SAIC, Brilliance, LG Chem, Foxconn, Boston Power, A123, BAIC BJEV leading the way among many others. Lithium is the magic metal at the very heart of this rEVolution and supply is already under strain even before Tesla Gigafactory and other Megafactories are coming on-line.

Lithium Race In "War On Pollution": Investors Swarming Lithium Battery Market In China.

Joe Lowry - Lithium Supply & Demand: Origins, Growth and Investment.

International Lithium Corp. Reports on Continuing Work in Argentina and Ireland With Ganfeng Lithium.

Saturday, 22 August 2015

Joe Lowry: A Closer Look At Albemarle - The Lithium Superpower.

When Elon Musk and Warren Buffett are investing billions into Electric Cars and Solar Power the people do pay attention. Headlines are very busy these days with electric cars chasing each other and coming to fight the mass murdering air pollutions on our streets. At the heart of this rEVolution is the magic metal - Lithium. Joe Lowry has published another brilliant article mapping the landscape of this fast growing space. Now you can get the real inside into the very opaque lithium market and its major players.
Where are billions at stake now in this rEVolution and why all that fuss about Lithium Hydroxide? Who controls Lithium Hydroxide market now? Lithium prices are already moving up, producers are demonstrating very strong pricing power: customers do realise that availability of Lithium supply is more important than its price already! Now you can better appreciate importance of International lithium J/Vs in Ireland and Argentina for Ganfeng Lithium. Security of lithium supply is taking the central stage before the next stage of explosive growth in this market.

At this time I can only add that my personal information based on industry sources, Tony Seba's vision and potential for Apple iCar to change all our landscape overnight have led me to believe that this growth has the potential to exceed all expectations. Joe Lowry's estimation of 150% growth in ten years can be very conservative in the end!
International Lithium is waiting now for Ganfeng's Board approval of the budgets for the new stage of development of International Lithium J/V projects in Ireland and Argentina. We had very positive results from the last round of exploration and now we will be moving faster on the way to confirm economic potential of our projects.
There is already pressure on lithium supply building up even before Tesla Gigafactory and other Megafactories from LG Chem, Foxconn, BYD, Boston Power and A123 are coming on-line. Below you can find information which can help you to dive into our Lithium space and Joe Lowry will be your best independent guide here.

International Lithium And Ganfeng Lithium: "The End Of The Lithium 'Big 3'.

Joe Lowry has published a very interesting article about the lithium market, major producers and rising Chinese powerhouses in lithium industry. You can find now more details on International Lithium strategic partner Ganfeng Lithium. Apple Electric iCar and Warren Buffet BYD move into energy storage to chase Elon Musk with his Tesla Gigafactory bring Lithium back onto the radar screens of investors now. Read more.

Lithium Race In "War On Pollution": Investors Swarming Lithium Battery Market In China.

Joe Lowry - Lithium Supply & Demand: Origins, Growth and Investment.

International Lithium Corp. Reports on Continuing Work in Argentina and Ireland With Ganfeng Lithium.

Joe Lowry:

A Closer Look at Albemarle - the Lithium Superpower

Albemarle’s Rockwood Lithium unit is the clear leader in the industry. Rockwood Holding’s former CEO Seifi Ghasemi did a great job of engineering their rise to a dominant position in the lithium world by, among other things, acquiring a 49% interest in Talison Lithium after being outbid for an acquisition by Sichuan Tianqi and securing government funds for a US expansion. Some would say his best move was the sale of Rockwood to ALB and making a well-timed exit to Air Products.

In a previous post I commented on the ALB second quarter earnings report that revealed the stellar results of their lithium business. ALB’s Q2 lithium EBITDA was about equal to FMC’s total Q2 lithium sales. Enough said. All seems well in the Albemarle lithium kingdom.

During the earnings call Q &A, ALB's CEO Luke Kissam spoke of the favorable pricing environment going forward:

My conversations with large lithium purchasers around the world validate Mr. Kissam’s statement – Rockwood has already told some customers there will be a double digit price increase in 2016 and there seems to be limited pushback. Most customers realize “availability” is more important than price for the next few years.

The pricing tailwind is more good news for ALB/Rockwood and their competitors. In addition ALB announced their new carbonate plant in Chile was recently completed and is now being commissioned. More product in a growing market with tight supply – what could be better? I am glad you asked……….

Potential Troubles on the Horizon?

The “recently” completed carbonate plant is the same one that was announced in 2012. Speaking in late 2014, then Rockwood CEO Mr. Ghasemi, said sales of battery grade carbonate from the new plant would be adding to 2015 earning:

I previously worked for a major lithium company with a history of delayed start-ups and cost overruns, so I know this happens. On the other hand - investors like to know a few of the "why" details to put things in perspective. The new plant was originally slated for Q4 2013 start-up. The original capital estimate was $140 million. A recent announcement stated capital was $200 million. ALB still doesn’t have a brine pumping permit from the Chilean government that will allow them to operate the new plant at anywhere near full capacity.

The long delay in start-up remains unexplained. I guess it seemed easier for Albemarle to announce the plant was recently completed and commissioning has just begun....... CEO Luke Kissam called the plant "on schedule". I guess he meant "revised schedule".

Albemarle "just completed" a plant that Rockwood actually completed some time ago. The goalposts appear to keep moving regarding when the carbonate expansion will operate and significantly add to ALB's lithium earnings. I consider this "story management" a deft use of the "reset" button that sometimes come with an acquisition and a transition in who manages the communications with analysts and stakeholders.

Regarding the brine permit situation, Signum BOX recently reported the following:

From my perspective the most interesting and bizarre recent comment from ALB is on the topic of a hydroxide expansion:

Mr. Kissam has already told the world his company is short of hydroxide capacity and yet he is going to wait until 2020 (maybe 2019) to bring on new capacity and ALB will employ a higher cost process using spodumene. Mr. Kissam recently stated that using spodumene as feedstock would “take a step” out of the process which although true is hardly a reason to do it. The spodumene route when all is said and done will be higher cost than feeding a new plant that uses carbonate as feedstock - assuming the carbonate comes from ALB/Rockwood's low cost Atacama operation. Perhaps Mr. Kissam is not revealing some breakthrough in spodumene technology – doubtful.

ALB will have to compensate their Talison JV partner (51% owner) for the spodumene feedstock. Obviously there must be a reason to source spodumene from a joint venture ALB only owns 49% of rather than leverage their 100% owned low cost carbonate position. I don't know what the reason is but there are a couple of plausible explanations.

One obvious reason to favor Australian spodumene over carbonate is a lack of confidence in your long term position in Chile given the government’s interest in grabbing a bigger share of the lithium pie going forward.

I defer again to Signum BOX regarding the Chile National Lithium Commission:

The "concept of shared value" language doesn't sound good for anyone in the lithium business in Chile.

ALB’s existing hydroxide facility in North Carolina came online in 2012. It is grossly undersized for the emerging hydroxide market, was initially plaqued with quality and operational issues and has left ALB as a small player in this market segment.

Overall ALB is the #5 player in hydroxide globally. Not really where a lithium superpower wants to be. FMC and three producer’s in China including Ganfeng, Sichuan Yahua, and Sichuan Nike Guorun have much larger hydroxide capacity than ALB and also produce battery quality product.

Instead of quickly building hydroxide capacity, Mr. Kissam said ALB is "making arrangements to meet market demand". He further stated "we have great plans in place for 2016" and "we are going to have the hydroxide available to meet market demand". Of course, the question is: "How?"

The short and likely answer is tolling contracts with competitors. Prior to being acquired, Rockwood was already negotiating with Chinese producers for short term hydroxide supply so it seems ALB is simply continuing the process but for a much longer time frame than Rockwood originally contemplated.

Lithium companies have a long tradition of tolling. In the past SQM has toll produced lithium carbonate for FMC. For many years FMC toll produced chloride for Rockwood. Ganfeng has toll produced lithium metal for both Rockwood and FMC. You get the idea.

Tolling can be a good long term strategy for capital avoidance or to take advantage of a competitor’s excess capacity and need for incremental revenue but it appears ALB will need to toll for at least four years when they should be able to execute a capital project in less than half that time to secure a long term position in an increasingly important product line.

For most of the last 20 years, the majority of cathode for lithium ion batteries has been made using lithium carbonate as a raw material. Starting late in the last decade, nickel based cathode requiring lithium hydroxide as the raw material grew in importance – first for power tool batteries and later for the batteries that power Tesla’s growth and other market segments.

The growth rate for hydroxide used in batteries has been more than double the growth rate of lithium carbonate for the past six years albeit from a small base. The growth rate differential between carbonate and hydroxide may increase if Tesla’s Gigafactory is a success and other companies employ nickel rich cathodes that require lithium hydroxide.

From my perspective, ALB’s stated plan not to have new hydroxide capacity until the end of the decade seems more like waffling caused by uncertainty over what the Chilean government is going to do in regards to controlling future development of lithium assets coupled with their uncertainty over the future growth of the hydroxide market. If ALB was really convinced they are best served by building a spodumene based “world scale” hydroxide facility - they wouldn’t be waiting four or five years to bring it online. Telling the world you are expanding based on an Australian resource but not actually doing it for a while gives you some wiggle room and perhaps is a early negotiating ploy in the coming discussions with Chile. Stranger things have happened.

During an interview at the American Chemistry Council’s annual meeting in Colorado Springs Mr. Kissam said: “I expect over time we should get 50 percent of the growth in lithium derivatives”. This statement is hard to square with the reality that lithium hydroxide is currently the fastest growing lithium chemical and ALB’s position is eroding rather than growing.

Fortunately for ALB they are more dominant in the downstream lithium market than they are in the upstream. For now, FMC is the only global competitor downstream from lithium hydroxide and their continuing disarray ensures ALB’s continued #1 position. In recent years, almost all the discussion of the lithium market has been about the key upstream products used in lithium batteries yet the majority or ALB’s lithium profits still come from products downstream from lithium hydroxide.

Maintaining downstream dominance long term will be another challenge as companies like Jiangxi Ganfeng Lithium have proven tough competitors in Asia and increasingly have global ambitions.

ALB’s ability to integrate Rockwood’s unique culture is another issue that doesn’t get much mention. Look for one or two key Rockwood Lithium executives based outside the US to depart in the next few months. The lithium world is very small and unique in many ways – it is not easy to replace experienced people. The only person in ALB’s top management with significant lithium experience recently resigned.

Securing the brine permit that enables full utilization of the lithium carbonate expansion is the near term critical milestone. I have no doubt it will happen at some point – let’s hope it is sooner rather than later.

Despite their current strong position and favorable growth prospects, challenges abound for the "Lithium Superpower".

Lithium Race: Apple Hires Tesla's Top Self Driving Engineer For Rival Electric Car Project.

We have another development with Tesla engineers and Apple Electric iCar. Tim Cook is still hiding iCar from us behind NDAs and military protected testing grounds. Bring it on, we are suffocating here! Now if NASDAQ will continue its dive into the Fall Apple can go shopping and try to buy Tesla. Elon Musk will hardly sell it, so the partnership between Apple and Tesla to use Tesla Model 3 power-train and Gigafactory will make sense to me. Apple has cash needed for Gigafactory, it will be the win-win deal for both companies. Apple will go to The Trillion Dollars Market Cap and Tesla will build more Gigafactories. Dear Elon, please consider Ireland for the next Gigafactory, Ganfeng Lithium and International Lithium will be happy to supply you with our Lithium from Avalonia J/V and you can take Europe by the storm. Another interesting twist will come with Foxconn and its mystery $15k electric car, where they are investing now more than $800 million in China into the production facility. Everything is changing very fast in our electric space this year. Foxconn is the largest producer of iPhones and iPads for Apple, can we have the same cooperation with Apple Electric iCar? Lithium is the magic metal at the very heart of this rEVolution and Lithium supply is already under strain even before Tesla Gigafactory and other Megafactories are coming on-line.

Welcome The First Trillion Market Cap Company: Documents Confirm Apple Is Building Electric iCar!

Finally, we have the confirmation about Apple Electric iCar. Now we can prepare ourselves to the overnight rEVolution and mass market for EVs with Apple brand power behind it. We have first Trillion market cap company in the making: Apple has finally found the place where to park its cash and brilliant team of designers and engineers, its powerful branding and distribution channels will bring EVs to the masses. Low cost manufacturing base will help as well, China Yuan devaluation is very timely and you can check on my entries below about Foxconn. This largest producer of iPhones and iPads is building its own Megafactory for mass production of lithium batteries and investing almost one billion dollars in the $15k Electric Car to be produced in China.
Lithium technology is already here, I was always advocating for Apple to buy the time to market and if not buy Tesla Motors outright, than to create the strategic partnership and use Tesla Model 3 power-train. Lithium is the magic metal which is at the heart of this rEVolution. Now we have the tide coming, all cars will be electric.
I will allow myself to put a lot of links today, after writing for years about it, I will celebrate the Steve Jobs' Legacy and Electric iCar is the best tribute to such great visionary. He has inspired Gary Schellenberg and myself to start International Lithium, when electric cars like Tesla were still a dream. Now, thanks to Elon Musk, they are here! Below you can find my thoughts on why, how and when Apple will create the mass market for electric cars.

MailOnline:

Apple Hires Tesla's Top Self Driving Engineer For Rival Electric Car Project.

By MARK PRIGG FOR DAILYMAIL.COM

Apple has hired a senior engineer from Elon Musk's electric car maker Tesla, according to a LinkedIn posting, as part of Apple's effort to build a team of experts in automated driving.

A LinkedIn profile for Jamie Carlson shows that he has left Tesla and moved to Apple.

At least six others with experience developing self-driving technology and systems have joined Apple, according to their LinkedIn profiles.

One designer's vision is of a semi-autonomous electric car in the minimalist tradition of Apple design, features external LED screens at the front and back with a discreet hatch and doors that open laterally

Attempts to reach all seven people were unsuccessful and Apple declined to comment.

Sources have said that Apple is developing a car and studying self-driving technology, but it is unclear if the iPhone maker is designing a vehicle that could drive itself.

Since January, Apple has hired Megan McClain, a former Volkswagen AG (VOWG_p.DE) engineer with expertise in automated driving, and Vinay Palakkode, a graduate researcher at Carnegie Mellon University, a hub of automated driving research.

In August, Apple hired Xianqiao Tong, an engineer who developed computer vision software for driver assistance systems at microchip maker Nvidia Corp (NVDA.O).

The Wall Street Journal has reported that Apple hired Paul Furgale, former deputy director of the Autonomous Systems Lab at the Swiss Federal Institute of Technology, earlier this year.

So-called advanced driver assistance systems, or ADAS, handle tasks such as keeping a vehicle in a lane or driving by itself in stop-and-go traffic, and they are considered the building blocks for self-driving cars.

According to Carlson's LinkedIn profile, he joined Apple in August in an unnamed position in a special projects group.

Through July, Carlson was an engineer on Tesla's Autopilot self-driving car program, and before that he worked on automotive vision systems for Michigan-based supplier Gentex Corp.

Other Apple hires since September 2014 with similar experience have worked at automakers BMW , Volkswagen and Ford Motor Co, automotive suppliers Delphi Automotive, Robert Bosch GmbH and TRW, now a part of ZF Friedrichshafen, according to their LinkedIn profiles.

This designer created a futuristic car, dubbed the Titan electric car, on Cinema 4D and added in a salt flat scene in the background

Focusing on Apple love of incorporating a stylish design with functionality, this concept is sleek with very little protruding from the body

Among those hired last fall were Sanjai Massey, an engineer with experience in developing connected and automated vehicles at Ford and several suppliers; Stefan Weber, a former Bosch engineer with experience in video-based driver assistance systems, and Lech Szumilas, a former Delphi research scientist with expertise in computer vision and object detection.

Tesla and Apple have long been involved in what many have called a 'poaching war' when it comes to self-driving cars. Although, Tesla CEO Elon Musk

has poached 5 times as many employees from Apple as Apple has from Tesla. Musk also commented that he 'hopes' Apple will enter the car market.

Eye-catching, sleek, incorporating Apple's trademark sleek design, these are what the world's graphic designers believe an iCar could look like.

Refuelling rumours the tech giant's next big project is to bring a self-driving car to market, documents obtained by the Guardian say the company is searching for a location to test the autonomous vehicles to rival designs already manufactured by Google.

In May, engineers met with officials from GoMentum Station, a 2,100-acre former naval base near San Francisco, in a bid to set up a high-security site.

Typically secretive, the company - who recently launched the Apple Watch - have yet to confirm or deny the rumours - but that hasn't stopped Apple fans speculating and imagining what it could look like.

In a correspondence obtained by the newspaper through a public records request, Apple engineer Frank Fearon wrote: 'We would ... like to get an understanding of timing and availability for the space, and how we would need to coordinate around other parties who would be using [it].'

The company did not confirm whether this was the case while others involved in the deal would not shed further light on the details.

'We don't know. They haven't said what they want to test. It could be an iPhone,' joked Jack Hall, program manager for connected vehicles and autonomous vehicles at GoMentum Station, which is operated by the Contra Costa Transportation Authority.

The agency is promoting a portion of the former Concord Naval Weapons Station as an ideal testing facility for carmakers and tech companies working on automotive technology.

One designer's concept for Titan, which is what Apple's project is rumoured to be called, is 'futuristic, but still doable by 2010,' he said

This innovative designer says the driver can just slide their key over the Apple logo and the front glass panel of the three-seater car will open up for entry

'It's got all the infrastructure of a city,' Hall said of the facility. 'There are buildings, streets and intersections, but no people.'

The 5,000-acre site has 20 miles of paved roads, including overpasses, tunnels and railroad crossings, according to the agency's website, which calls it 'the largest secure test facility in the world.' Another 7,600 acres of the former navy base is now used as a shipping terminal by the U.S. Army.

GoMentum Station already has an agreement with Honda, which plans to test automated vehicle systems there.

Hall said his agency hopes to partner with other companies for testing self-driving cars and 'connected vehicles' — cars that use the Internet and local networks to exchange a variety of information with other devices and vehicles.

Apple has 'shown interest' in the facility but has not reached any agreement for testing there, Hall said. Company representatives have not actually visited yet, he said.

This creative designer embellished his curved iCar concept with Apple logos on the front and on all the car seats

This graphic designer thinks the iCar could be a sports utility vehicle, which he designed in red using aluminium for the front

The Guardian also quoted another official at the transportation authority who said Apple insisted on a non-disclosure agreement which barred him from saying any more.

A number of automakers and tech companies, including Google, are working on new designs for autonomous and electric-powered vehicles.

In February, The Wall Street Journal cited unnamed sources who said Apple is working on designs for an electric vehicle to be sold under the Apple brand.

Analysts say Apple has the financial wherewithal and ambition to pursue such a project, although some believe it's more likely interested in developing software for use in cars made by other companies.

Other evidence of Apple's interest in cars has surfaced in recent months, including a lawsuit in which a Massachusetts startup working on electric car batteries accused Apple of poaching some of its engineers. The lawsuit has since been settled."