Our world is experiencing a massive shift.
I got an inside view of this shift last month, when I spoke at the Vancouver Resource Investment Conference.
It’s one of the largest natural resource conferences in the world.
While I was there, I met with miners, geologists, asset managers, and precious metals and raw materials specialists.
Nomi speaking on a panel at the Vancouver Resource Investment Conference last month
There was a lot of interest in the standard metals – gold, silver, and copper.
But there was another metal that got a lot of attention as well. In fact, it was one of the hottest metals in the room behind the usual three.
It’s a metal that packs a broad punch. And it’s the premier ingredient in one of the top trends on my radar: the electric vehicle (EV) revolution.
So today, I’ll show you why I believe demand for this metal is set to soar… and how you can position yourself to profit as it does…
A Key Ingredient in the Electric Vehicle Revolution
The metal I’m talking about is lithium.
Lithium is a soft, silvery-white metal. It’s the least-dense and lightest metal.
Today, 74% of lithium is used in batteries. Rechargeable batteries made from lithium are lighter than other kinds of batteries. That’s why they are so popular for EVs.
And with huge growth predicted in the EV market, which I’ll tell you about shortly, it’s no wonder lithium has become one of Wall Street’s favorite materials.
In 2021, lithium miners in the Americas raised $3.4 billion from investors. That’s up from just $173 million in 2020.
And the driver for Wall Street’s interest is the EV revolution I mentioned up top.
See, the demand for electric vehicles is about to rocket.
In 2011, just 600,000 EVs were sold worldwide. By 2019, that had risen to over 2 million. And by last year, that had more than tripled to 6.6 million.
That’s a 10,900% increase in a decade, as you can see in the chart below.
And it’s estimated that by 2030, annual global EV sales will reach 26 million. That’s four times current sales.
All told, the number of EVs on the road across the world will go from 16 million today to 300 million by 2030.
And this means demand for the metals used in EV batteries will soar.
This next chart shows a breakdown of the various metals that are used in EV batteries, by cost. As you can see, lithium makes up 40% of the cost. Nickel accounts for 30%, and cobalt accounts for 20%.
Because lithium is the most efficient and lightest metal for EV battery production, the EV market accounts for about 80% of lithium-ion battery demand.
Prices Rising as Demand Soars
Demand for lithium has already been growing steadily in recent years, as you can see in this next chart.
In 2021, global demand totaled 465,000 metric tons. This year, it is expected to reach 559,000 metric tons.
And with EV sales taking off, global demand for lithium is set to quadruple to more than 2 million metric tons per year by 2030.
The exploding growth of EV sales has already driven lithium prices higher.
The lithium price index is up 119% so far this year. And it’s up 392% over the last 12 months, as you can see in this next chart.
This all bodes well for the lithium-mining industry…
Demand Will Outstrip Supply
But amid soaring demand and prices, there are concerns about supply.
Last year, 436,000 metric tons of lithium were mined worldwide. As this next chart shows, by 2030, that figure is expected to increase to 1,466,000 metric tons.
But that’s not enough to meet the 2 million metric tons of annual demand projected by 2030.
This shortfall in global supply and increasing demand will keep lithium prices high.
But that’s not the only reason why I’m so bullish on lithium… and the companies that mine it.
Lithium is also attracting attention and support from a massive player – the U.S. government.
America Fighting to Regain Its Position
Prior to the 1990s, the U.S. was the leader in lithium production. But it ceded this dominance, mainly due to mining costs. Today, less than 2% of the world’s supply of lithium is produced in the U.S.
Right now, the biggest producers of lithium are Australia, Chile, China, and Argentina.
Australia produces just over 50% of the world’s lithium. About a quarter of the supply comes from Chile, 14% comes from China, and 6% comes from Argentina.
However, that could be about to change… Because the U.S. government is fighting to regain its position in the lithium market.
As I told you last month, on March 31, 2022, President Biden invoked the Defense Production Act (DPA) of 1950 to bolster domestic production of the raw materials used to manufacture electric vehicle (EV) batteries. This was in response to rising energy prices and geopolitical tensions.
The goal is to make America less dependent on other countries for the strategic minerals we need to power EV batteries, including lithium.
Biden believes it’s “essential to our national security,” and to the “development and preservation of domestic critical infrastructure.”
This gives U.S. mining companies access to $750 million under the DPA’s Title III fund.
That fund covers “feasibility studies, co-product and by-product production at current operations, and productivity/safety modernizations.”
Also, the U.S. government is allocating $3 billion in the Bipartisan Infrastructure Law to boost domestic battery manufacturing and supply chains.
This will fund refining and production plants for battery materials, battery cell and pack manufacturing facilities, and recycling facilities.
And the National Blueprint for Lithium Batteries aims to urgently develop a domestic lithium-battery manufacturing value chain.
Now, as with all government projects, there will be a ton of red tape. But history shows that when Washington allocates more money to a sector, big players on Wall Street direct their investments accordingly.
That’s what has led to the Great Distortion between the financial markets and the real economy I’ve been telling you about.
And it’s the basis for the profit opportunities I see in my five key distortion themes – New Energy, Infrastructure, Transformative Technology, Meta-Reality, and New Money.
Because here at Inside Wall Street, my goal is to follow the money and provide you with simple ways to profit on those money flows…
How to Play It
To position yourself to benefit from the growing demand for lithium worldwide, you can consider investing in the Global X Lithium & Battery Tech ETF (LIT).
The fund invests in the full lithium cycle, from mining and refining the metal, through battery production. So, it gives you broad exposure to this fast-growing industry.
As an exchange-traded fund (ETF), it also carries less company-specific risk than investing in individual companies.
And keep an eye on your inbox tomorrow…
I’ll show you another key metal that’s set to benefit from the New Energy transition and the growth of the EV market worldwide. But its supply may be under threat… which means opportunity for savvy investors.
Happy investing, and I’ll be in touch again soon.
Editor, Inside Wall Street with Nomi Prins
P.S. The next chapter of the Great Distortion is about to begin… And it could trigger a $4 trillion market shock. When wealth shifts like this have taken place before, the financial and political elites have been the ones to profit. And that’s hardly surprising… seeing as they’re the ones deciding where the money goes.
But for the last couple years, I’ve been working on a new strategy to help level the playing field. With it, you could make up to 10x your money in less than a month, even if stocks are crashing.
I’ll reveal all the details at a special online strategy session on Wednesday, June 15 at 8 p.m. ET. To reserve your spot, just click here.
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