There’s a tectonic shift happening in front of our eyes. And it’s time to jump on board…
I’m talking about the rise of electric vehicles (EVs).
It’s a trend that Daily editor Teeka Tiwari and I have been watching closely for years. But it wasn’t yet ready for prime time.
Despite strongly worded memos from world governments… the infrastructure and willpower were lacking.
But that’s finally changing.
Iconic manufacturers like Ford, Volkswagen, Toyota – and even Ferrari and Lamborghini – are rolling out EV versions of their most popular models.
For instance, Ford just revealed an electric version of its top-selling F-150 pickup truck. It’s called “the Lightning.”
The F-150 has been the top-selling make and model since President Reagan was in office. So it shows just how much the car industry is changing.
According to Business Insider, over 60 million EVs will hit the road over the next five years. That’s 4.6 times today’s figures.
And Meticulous Research projects the EV market will grow almost 34% annually… hitting $2.5 trillion by 2027.
That momentum is being driven by more than 110 countries mandating carbon-neutral emissions by 2050, including the European Union, Japan, and the U.S.
The writing is on the wall. The days of the internal combustion engine are numbered.
But it won’t happen overnight… And that means we’re still in the early stages of this massive trend.
And when you position yourself early in a massive trend… the profit opportunities are tremendous (think crypto and cannabis).
But this megatrend requires a unique approach…
The “Alternative” Way to Play the EV Boom
Most people are placing their bets on which EV maker will win or which battery maker will ink a multibillion-dollar deal with a major carmaker.
But it’s too early – and risky – to pick the exact winners. EV technology is growing by leaps and bounds every year. So what’s cutting-edge today could be outdated tomorrow.
Instead, we need to focus on the two most critical elements this industry needs no matter who wins: copper and lithium.
That way, we’ll profit regardless of who’s using them to become winners in this space.
First up, copper.
It’s in almost all electronics. And for the most part, it’s been in abundant supply. But at current growth rates, there’s no way supply can keep up with demand.
You see, virtually every sector that’s on fire right now needs copper: housing, electronic devices, and cars.
EVs need three times the copper used in gas-powered cars. So an increase in EVs will lead to a surge in copper demand.
The market is waking up to this supply crunch. That’s why copper is trading at 33-year highs.
But copper isn’t the only commodity facing a supply crunch. There’s also a critical shortage of lithium.
High-quality lithium used to make EVs is expected to see severe shortages by the mid-2020s.
Specifically, EV companies need a special kind of lithium called lithium hydroxide. And this market is so new, there aren’t any specific studies that show just how large the supply gap is.
But what we can do is follow the money…
The crunch is pushing automakers to do something they’ve never done before: Buy mining companies.
Even a couple of years ago, you’d be ridiculed for even suggesting that car makers should partner with – or outright buy – mining companies.
The two businesses had little overlap. And the most common metals used, like steel and aluminum, are in abundant supply.
But that’s not the case today.
The shortage of lithium is threatening EV growth plans. If a big player like Toyota can’t get its hands on enough metal, it can’t run its assembly lines.
And carmakers are alert to this risk. For example:
- Tesla recently considered buying Cypress Development, an early-stage lithium mine in Nevada. Talks fell through. But Tesla’s still on the hunt to purchase mining rights in Nevada.
- Volkswagen has secured a 10-year supply of lithium from China’s second-largest producer.
- And Toyota’s trading arm recently secured a supply agreement with an Australian lithium miner.
We’re likely to see other automakers partner with lithium miners to secure supplies for their EV fleets. And that’ll be a boon for lithium prices.
How to Profit From This $2.5 Trillion Megatrend
Remember, the EV market is set to hit $2.5 trillion by 2027.
And with an unprecedented number of EVs coming to a street near you… we’ll hitch our carts to companies that mine lithium and copper.
If you want broad exposure to this trend, consider the Global X Lithium & Battery ETF (LIT). It holds a basket of the top lithium miners and battery makers in the EV space.
Analyst, Palm Beach Daily