Part of my job is staying on top of the headlines.
That can be hazardous to my health sometimes … or at least my blood pressure. But it’s crucial to keep up with what’s going on, especially in the hypergrowth trends where you tend to find the biggest upside potential.
Today was a good day, as it included the news that Volkswagen Group (OTCMKTS:VWAGY) just invested another $200 million in a battery startup called QuantumScape. But the really good news is that it’s just the tip of the iceberg.
In the past week or so:
- We heard about a “million mile battery” from China.
- Morgan Stanley declared electric delivery vans to be the next big thing … “similar to what [Tesla’s (NASDAQ:TSLA)] Model 3 has done for the consumer market,” says United Parcel Service (NYSE:UPS).
- We got the 2020 Global EV Outlook from the International Energy Agency. The number of electric vehicle (EV) charging points jumped 60% (worldwide) in 2019!
As I’ve been saying for a while, the future of cars is electric. European carmakers are mandated to cut carbon dioxide emissions by one third in just 10 years. China is also pivoting to electric vehicles to combat its air pollution crisis. And so will Americans, whenever they want to save money on gas.
Notice that what I’m talking about is mandatory. It’s systemic. And it’s global. That’s where you put your chips for a long-term investment.
At this point, all the biggest automakers have an EV model that goes just as fast and feels just as cool to drive as your dad’s old muscle car. (Ah, the memories.)
The next hurdle to clear is the biggest: the battery. The internal-combustion engine may be 100-year-old technology, but so far EVs have struggled to compete, largely due to severe limitations with the current batteries.
Right now, EVs rely on the same technology first developed for Sony camcorders in the 1980s: the lithium-ion battery.
It’s the same battery you’ll find in your smartphone and laptop, too. But to power something on the level of a Volkswagen, the lithium-ion battery becomes incredibly bulky. That bulk just amplifies one of the other problems with the battery: It has a liquid electrolyte inside that is flammable.
But all over the world, regulators are laying down the law to get people to make the switch to electric cars – from California to Germany and even China (which struggles with pollution).
So naturally, automakers are revving up their search for an alternative battery.
It’s not just the automotive industry that wants next-generation batteries. Electronics makers do, too. The global upgrade to 5G wireless (another big mega-trend I’m following right now) will require a lot more from our devices than lithium-ion batteries can sustain.
But Volkswagen and BMW (OTCMKTS:BMWYY) are participating in a $1 billion grant program from the German government, just for battery research. Other German automakers like Porsche (OTCMKTS:POAHY), Audi (OTCMKTS:AUDVF), and Mercedes all want next-generation batteries in their fleets as soon as possible, too.
In Japan, a “battery cartel” of sorts has sprung up. That government is working with researchers — plus major names like Toyota (NYSE:TM) and Panasonic (OTCMKTS:PCRFY) — to get a particular new technology to market.
Toyota had planned to roll out its first solid state battery vehicles at the Tokyo Olympics this summer. The games may have been canceled due to the COVID-19 pandemic, but the company could still be close to launching a solid state battery EV.
Why solid state? With this battery, you could get DOUBLE the range after just 15 minutes of charging.
Plus, you don’t need the liquid electrolyte, so these batteries aren’t flammable. In one memorable test, a startup called Ionic Materials shot its battery with a Remington .22. It took three bullets, did not catch fire, and kept working!
These smaller companies — once they’ve had the chance to prove themselves — are where I like to find buys for Early Stage Investor. They’ve got key patents on the technologies that the bigger guys (the Toyotas and Volkswagens) need in their products.
Batteries are critical to the ongoing shift to Transportation 2.0, which will send trillions of dollars sloshing around in the coming years … and create one of the great investing opportunities of our lifetimes.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.