When it comes to reasons people won’t buy electric vehicles (EVs), “range anxiety” is near the top of the list.
That’s the fear that a charge won’t get you very far. Even if you don’t drive an EV, you may get “range anxiety” when your low fuel warning light goes off and you don’t know where the nearest gas station is.
However, that fear about EVs is rapidly going away.
Check out this conversation between reporters Cardiff Garcia and Camila Domonoske. It’s from NPR’s Planet Money last November …
DOMONOSKE: Right. And it’s a reasonable anxiety if you consider the first Nissan Leaf had a range of 74 miles.
GARCIA: Yeah, you’d be anxious the whole time, basically (laughter).
DOMONOSKE: And that’s been a huge issue for the auto industry, so they’ve been laser-focused on fixing it, mostly by giving cars bigger batteries. Mark Wakefield from the consulting group AlixPartners – he’s been tracking the average range of new electric vehicles.
WAKEFIELD: Late 2017, it was sort of in the 130 range. It’s now 250.
DOMONOSKE: And it keeps going up. Three hundred is super-common now, and some Teslas are pushing 400 miles.
But as Domonoske’s reporting shows, there is a new fear gripping consumers and keeping them from jumping into a Tesla Model 3, a Chevy Bolt EV, or a Hyundai Ioniq EV: charging time anxiety.
Again, from the transcript of their conversation:
DOMONOSKE: Right. And while [EVs are] still too expensive for many people, they’re expected to get a lot cheaper in the next few years. But now people are worried about how long it takes to charge.
GARCIA: Yeah. And that’s a fair question, I guess. How long does it take to charge an electric vehicle?
DOMONOSKE: More than 15 minutes, less than two days.
The simple fact is charge times aren’t consistent enough for many U.S. consumers. When you stop at a gas station while you’re on your way to the beach, you know your car will be full by the time you’re done buying a soda and a bag of chips.
With an EV, that isn’t the case. Charging your vehicle at home can take hours and hours, while charging it at a state-of-the art “fast charger” can still take 20 to 30 minutes.
That means charging on the go isn’t impossible — but it can add hours onto a long road trip.
Moreover, little inconveniences will pop up. If your house’s power goes out one night and your car doesn’t charge, you may have to stop on your way to work … and that charge could make you late for an important meeting.
Fortunately, entrepreneurs and R&D departments around the world are working hard to solve this problem.
For example, one Israeli start-up already is creating fast-charging batteries.
Today, let’s take a closer look at that young company.
Plus, I’ll explain why this development is good for my favorite way to invest in the EV megatrend …
Good Chemistry Gets Better
StoreDot Ltd., based near Tel Aviv, has been demonstrating prototypes of its ultra-fast-charging batteries since 2018. But earlier this week, the company said it has produced 1,000 batteries on an actual assembly line.
The company has shown that these car batteries can deliver a 250 mile-range charge in just five minutes. There are numerous technical hurdles to deploying such high-powered chargers, however, so for now, the batteries currently used in EVs will have to do. (StoreDot is giving those 1,000 batteries to various automakers so they can test them further.)
StoreDot’s goal, then, is to make its products commercially available by 2025.
What makes these batteries different? As The Guardian explains:
Existing Li-ion batteries use graphite as one electrode, into which the lithium ions are pushed to store charge. But when these are rapidly charged, the ions get congested and can turn into metal and short circuit the battery.
The StoreDot battery replaces graphite with semiconductor nanoparticles into which ions can pass more quickly and easily. These nanoparticles are currently based on germanium, which is water soluble and easier to handle in manufacturing. But StoreDot’s plan is to use silicon, which is much cheaper, and it expects these prototypes later this year. Myersdorf said the cost would be the same as existing Li-ion batteries.
Out of all that, here’s what I notice: While some of the chemistry changed, these are still lithium-ion batteries. That means their core metals will likely remain the same.
In other words, we’re going to see more and more demand for “battery metals” over the coming years.
That’s why, in the brand-new Fry’s Investment Report Monthly Issue, I named the “Battery Metal ‘Rush’” as one of four “power trends” to watch in 2021.
While global production of industrial metals like zinc, copper, aluminum, and nickel has been flatlining for the last few years, demand for these metals has continued to climb higher.
That’s because a paradigm shift in commodity demand has burst onto the scene.
That paradigm shift is what I’ve been calling the Second Electric Revolution — the massive global migration toward technologies like electric vehicles (EVs), renewable energy, and energy storage.
All of these innovations are “metal hogs,” and as the new technology from StoreDot shows, companies are going out of their way to improve this technology and hasten its adoption.
More lithium-ion batteries means more demand for battery metals.
That makes this moment a rare investing opportunity for one battery metal in particular …
One Metal to Play the Battery Boom
Nickel is key to all lithium-ion energy storage. In fact, Bloomberg New Energy Finance (BNEF) predicts nickel demand for EV batteries will skyrocket 14 times over by 2030.
The chart below shows the range of mind-boggling demand projections for nickel and other battery metals.
Elon Musk, now the world’s richest man, has said:
I’d just like to reemphasize, any mining companies out there, please mine more nickel. Wherever you are in the world, please mine more nickel and don’t wait for nickel to go back to some high point that you experienced some five years ago or whatever, go for efficiency… Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. So, hopefully, this message goes out to all mining companies. Please get nickel.
Musk’s offhand comment echoed a previous comment from Sarah Maryssael, global supply manager for battery metals at Tesla Inc. (NASDAQ:TSLA), when she stated, “Tesla expects global shortages of nickel, copper, and other EV battery metals due to underinvestment in the mining sector.”
For the moment, nickel supplies are sufficient to meet current demand. But industry insiders expect a growing supply deficit to develop in the nickel market within the next two or three years.
“There has been a surge in demand for nickel sulphate in recent years,” notes Andrew Mitchell, head of nickel research at Wood Mackenzie. “Global consumption increased by 28% in 2019, primarily driven by the electric vehicle market. And as the EV revolution gathers speed, demand for battery materials will accelerate.”
If there is one metal you need exposure to in order to profit from increasing demand for battery metals, it’s nickel.
Unfortunately, “pure play” nickel stocks are few and far between. The ones that do exist are small-cap foreign stocks.
Fortunately, I have found an approach that enable investors to capitalize on any major move in nickel, along with similar moves in other industrial metals.
I laid out that strategy in a recent special report: Investing in Red, White, and Blue Stocks.
Find out how to get that report here.
On the date of publication, Eric Fry did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends … before they take off. And when it comes to bear markets, you’ll want to have his “blueprint” in hand before stocks go south.