Billions More Flowing into EVs

Nissan announces nearly $18 billion of EV investment … eyes on the EV “tipping point” … it’s hard to be too bullish about this battery metals trade

 

Another day, another story of billions of dollars flowing into electric vehicles and batteries.

Yesterday, Nissan announced plans to spend $17.6 billion over the next five years as it adds 20 new battery-powered vehicles to its roster.

This investment is twice the amount that Nissan has spent on electric vehicles since 2010.

From The Wall Street Journal:

Nissan said nine of the 20 new vehicles to be introduced by 2026 would be purely battery-powered EVs.

The others would include Nissan’s version of gasoline-electric hybrids, vehicles powered by electric motors but equipped with a small gasoline engine to recharge the battery while driving.

Regular Digest readers recognize this as just one of many similar stories.

For example, in late September, Ford and its battery supplier, SK Innovation, announced plans to invest more than $11.4 billion in two new U.S. plants that will produce electric vehicles and batteries.

That was on top of the $30 billion that Ford previously said would go toward electric vehicles through 2025.

This is a sector-wide revolution.

For example, GM is spending $4.6 billion through a joint venture with LG Chem for battery production starting in 2023.

And earlier this fall, BMW announced it had ordered upwards of $24 billion of batteries.

Returning to the Nissan news, what’s interesting is the comment from Nissan’s chief operating officer about growth in the electric vehicle market (bold added):

The tipping point of EV adoption will be driven by advancement in electric platforms, powertrains and battery technologies.

Does that sound familiar?

***If so, it’s because you likely read a very similar point from our hypergrowth specialist, Luke Lango, earlier this month

For newer Digest readers, Luke is our hypergrowth expert, and the analyst behind Innovation Investor. His specialty is finding market-leading tech innovators that are pioneering explosive trends, capable of generating outsized investor wealth.

Here’s Luke, two weeks ago:

The EV Revolution has arrived.

But here’s the thing: The EV Revolution won’t go mainstream until we make better batteries.

That harsh reality here is that while batteries make things work, today’s batteries are keeping EVs from working as well as they could.

Luke has done extensive research into the current battery market, including the next-gen “solid-state” battery that’s going to transform everything.

Here’s a quick overview from Luke on the significance of solid-state technology:

The implications of solid-state battery chemistry are huge.

Solid-state batteries could be the key to making our phones sustain power for days… enabling our smartwatches to fully charge in seconds… and, yes, allowing electric cars to drive for thousands of miles without needing to recharge.

That’s why solid-state batteries are dubbed by insiders as “forever batteries” — and it is why these forever batteries are the critical technology needed to propel the EV Revolution into its next phase of supercharged growth.

Luke has put together a research video on a tiny battery stock he’s bullish on today. You can click here to watch.

In any case, this EV revolution will drive enormous investment returns for top-tier EV manufacturers, EV infrastructure companies, battery companies, and battery metals (and battery metal miners) this decade. Make sure your portfolio has exposure.

***In related news, this EV explosion just strengthens the case for copper

Regular Digest readers know that another decade-long megatrend we’re incredibly bullish about is copper. Much of our enthusiasm is due to research put together by our macro specialist, Eric Fry, editor of Investment Report.

As Eric has pointed out, we can’t have a green future with amazing new battery technologies without copper:

The average EV uses almost half as much copper as the average American house, and EVs aren’t the only “green” products that are “metal hogs.”

  • Wind energy uses five to 10 times more copper per unit of electrical energy than does the conventional burning of coal.
  • Photovoltaic solar power uses six times more copper per unit of electrical energy.
  • A Tesla Model 3 requires 240 pounds of copper, which is nearly four times what a midsized internal combustion vehicle requires.

Therefore, as the renewable energy boom gains momentum, it will produce an echo-boom in demand for key battery metals.

Plus, research suggests even tomorrow’s solid-state batteries will require copper.

From Brown University, back in October:

In pursuit of batteries that deliver more power and operate more safely, researchers are working to replace the liquids commonly used in today’s lithium ion batteries with solid materials.

Now, a research team from Brown University and the University of Maryland has developed a new material for use in solid-state batteries that’s derived from an unlikely source: trees.

Well, not just trees. The substance is a combination of polymer tubes derived from wood and, you guessed it – copper.

Back to the report from Brown (bold added):

Qi and Qisheng Wu, a senior research associate at Brown, performed computer simulations of the microscopic structure of the copper-cellulose material to understand why it is able to conduct ions so well.

The modeling study revealed that the copper increases the space between cellulose polymer chains, which normally exist in tightly packed bundles.

I’ll spare you the rest of the jargony details from the report. But the bottom-line is tomorrow’s next-gen batteries need copper.

And all this copper demand is creating a problem…

***Get ready now for a copper shortage

Let’s jump straight to Yahoo! Finance:

The world is currently grappling with a copper shortage that’s causing a surge in prices this year — the vital metal is at its highest cost in more than 1,000 years.

It’s ironic that such a common metal is scarce — only 12% of the entire world’s reserve has been mined throughout human history. An incredible amount of copper is still buried underground…

Thanks to the world’s appetite for renewable energy projects and electric vehicles (EVs), copper has reached peak demand, and that hunger may not subside anytime soon…

In addition to electric cars, power grids that get electricity from wind, solar and hydro sources need an astronomical amount of copper.

As the world shifts toward a decarbonized economy, more copper will be needed, but unfortunately, even though the earth is blessed with an untapped amount of copper, current demands outweigh supply.

From electric cars, to solar energy, to large-scale battery storage, to cutting-edge tech products…tomorrow’s technology requires battery metals including copper. This is a heightened demand that didn’t exist to nearly the same degree decades ago.

Back to Eric:

Now that green technologies are powering a boom for certain battery metals, the mining industry finds itself ill-prepared to meet the rising demand…

I believe that future “battery metal” demand will exceed current forecasts by a large margin. An “unexpected” demand surge could emerge for several reasons:

  • EV adoption growth could accelerate faster than current forecasts…
  • “Non-factors” like electric bikes and scooters could advance from mere curiosities to household necessities…
  • And utility-scale energy storage could embark on an explosive growth phase.

Align your wealth with copper today – before we’re feeling these extreme shortages – and watch what happens to your net worth when this coming scarcity hits.

***Take advantage while copper is still down from the latest Omicron scare

In past Digests, we’ve highlighted the Global X Copper Miners ETF (COPX) as a way to play copper. Eric has recommended COPX in the past as well. His official trades have profited to the tune of 100% and 85% respectively (he sold in tranches).

COPX got nailed last Friday, falling roughly 5% on the day. It made back about half of that yesterday, but is under pressure again as I write Tuesday morning. But the lower the price today, the greater your returns down the road after copper resumes its upward march. So, we see this is a long-term buying opportunity.

In fact, if you look at COPX’s chart, it’s still building a base after bulls took profits following the massive run-up that topped out in the spring.

Chart showing COPX trading sideways since the summer, building a base
Source: StockCharts.com

Wrapping up, if you’re looking for a decade-long buy-and-hold investment, this is it, and this is a solid entry point. We simply cannot have tomorrow’s mindboggling technologies without copper, period. And that makes us about as bullish as possible for copper’s long-term investment case.

For more of Eric’s research and investment recommendations on copper and battery metals as an Investment Report subscriber, click here.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg


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