Go Under the Hood for EV Investment Opportunities
Plus, meet the airport of the future
Ric Edelman: It's Thursday, January 26th. The world is moving rapidly toward clean technologies, renewable energy, hydrogen fuel cells, electric vehicles. A lot of this is changing the way we power our lives. This is all because governments around the world are demanding that we meet aggressive climate change goals. Most countries are calling for net zero emissions by 2070, some as soon as 2050. But for all that to happen, we have to build the products, and those products require raw materials, natural resources like lithium, copper and uranium, rare earth materials, neodymium, terbium. Never even heard of these things: praseodymium, dysprosium. I hope I'm pronouncing all these things right. This is all crazy.
I learned about all these things in a new interactive website called ChartingDisruption.com. This was put together by Global X ETFs in partnership with the Wall Street Journal. You can go check it out. ChartingDisruption.com. You can get the full report if you don't want to just limit yourself to the interactive website. You can get the full report at GlobalXETFs.com. This is really very fascinating. All of these minerals are required in order to build the products that we're building to have clean energy. We're talking about those crazy words I had trouble pronouncing. They're used in the manufacture of magnets that go into wind turbines, motors, robotics and drones. Zinc is used as a coating to protect wind turbines and solar panels from rust. It's also used, of course, in batteries and galvanized steel.
I don't know if you've heard of graphene. This is the thinnest material ever invented. It's one atom high. It literally has no height. It has two dimensions width and depth, but no height. And yet it's 100 times stronger than steel, but it bends. It can be used in transportation, aerospace and construction. Copper is well known for its high connectivity and its resistance to corrosion. That makes it a key component in renewable energy like wind and solar power systems. The problem is that clean energy consumes a whole lot more of these minerals than the products we currently use.
I'll give you an idea. Lithium-ion battery packs. Well, that's a key element of an electric vehicle. Ordinary cars don't really need a lot of lithium because there isn't a big battery in your car. The thing is, just a box weighs a few pounds in the front of your vehicle, but a battery pack in an electric vehicle runs the whole length and width of the car. These things require 16 pounds of lithium, 77 pounds of nickel, 44 pounds of manganese, 30 pounds of cobalt. That's for one battery pack in one car. This is a huge demand for these natural resources to produce one megawatt of wind power. We've got to use three tons of copper. And by the way, that's for a land-based windmill. An offshore windmill needs nine tons of copper plus massive amounts of manganese, zinc and more. Same thing for solar power systems.
In fact, a German company right now is selling a solar car. They plan to deliver the first vehicles by the end of the year. Solar cars have a battery pack. You plug them in to charge, just like other electric cars. They also have solar arrays on the roof and on the hood. They don't get very many miles just yet, up to 20 miles a day. In ideal conditions, that doesn't sound very good, but it's perfect if all you do are run local errands. And by the way, this vehicle only costs $25,000. Tesla doesn't make a car that's electric for $25,000. In fact, Tesla's been cutting its prices. They're now 15% to 25% cheaper than a year ago. Why is Tesla cutting its prices? Because it's just another car company now. They used to have almost 100% of the electric vehicle market. They're now down to 66% because every carmaker now has electric vehicles. Next year, there will be 140 models to choose from. Tesla was popular not because it was popular, it's because there weren't any alternatives. There was no other option. If you wanted an electric vehicle, Tesla was pretty much it. But now nobody needs to drive a Tesla. Pretty soon nobody will. Other car manufacturers are real car manufacturers. They make better quality cars at better prices with better service.
Tesla is going to go the way of the DeLorean. It was cool for a while, but eventually you could only find one in a museum. And that's because this technology of electric batteries is becoming so easy and cheap to produce. But it requires a lot of lithium. Add it all up and we need 20 or 30 or 40 times as much lithium in the future as we did in the past.
And where does all this stuff come from?
Russia. They are the second largest producer of platinum and cobalt. Most of the copper comes from Chile and Peru. Brazil is the second largest producer of graphite. Australia is number one for lithium. They've got a 55% share. But lots of lithium also comes from South America, too, along with platinum and manganese. Nickel comes mostly from Indonesia and the Philippines. The Democratic Republic of Congo produces 71% of the world's cobalt.
And then there's nuclear power. China says they're going to build 150 nuclear power plants in the next 15 years. That's 10 a year. That's more than the rest of the world has built in the past 35 years. They're going to spend half a trillion dollars doing this. Other countries are building smaller nuclear power plants. They're cheaper and safer and they can serve smaller cities. But the bottom line is the demand for minerals and rare earth elements, it's going to skyrocket over the next couple of decades.
This increased demand when there is limited supply? Well, you know what that means. Higher prices. That means there's an investment opportunity here. So you might want to consider adding minerals to your portfolio. It's easy to do these days. You can do it with ETFs at Global X. For example, they have the Global X Copper Miners ETF. The symbol is COPX. The Disruptive Minerals ETF, DMAT. The Gold Explorers ETF, GOEX. The Hydrogen ETF, HYDR. The MLP and Energy Infrastructure ETF, MLPX. The MLP ETF, MLPA. The Silver Miners ETF, SIL. And the Uranium ETF, symbol URA.
So you might want to consider that if we're moving toward a green environment with green technology, you might want to invest not only in the companies that are creating these products, but in the raw materials that these companies are going to be buying to create those products. Pretty cool idea.
Meet the airport of the future
Another subject I want to talk with you about today is based on a very simple question. Are you planning to fly somewhere? Well, you know the drill. You have to go to the airport. Well, wait a minute. In the future, you're not going to be going to the airport. You're going to be going to the vertiport. Actually, you already can.
There's a vertiport outside of Paris. A vertiport is used not by airplanes at airports, they are used by eVTOLs - flying taxis electric vehicles that take off and land vertically like helicopters. But they use electric rotors like drones, not jet turbines like planes. So that's what they really look like, a big fat drone, big enough to actually hold a person or actually half a dozen people.
The Paris Olympics is coming in July of 24, next summer. The vertiport in Paris plans to be operating 10 air taxis by then, each flying three trips an hour, all in time for the Paris Olympics. You buy tickets with an app when you get to the terminal. Facial recognition confirms your identity. A floor sensor measures your weight. This lets the aircraft know how much power it's going to need for the flight so they know when to recharge the batteries.
The terminal is really small, the size of an apartment because you're only going to be there for about 10 minutes. No three hour waits in an airport anymore. You're going to arrive, park your car, walk in, take off. Pretty cool. These vertiports are already going up in California, London and Singapore. They're silent. They offer autonomous flight, which means you don't need a pilot; that seat can be filled by a passenger. Pretty cool stuff. So if you want to fly around the world to look for raw minerals, you'll be able to do it in eVTOLs - a vehicle landing electric aircraft.