This Ingredient Is Shaping the Future of Transportation
And why demand for it is sending prices sky high
Ric Edelman: It's Wednesday, July 5th. Hope you had a fabulous Fourth. General Motors has just invested $650 million into a lithium mine in Nevada. The mine is going to start production in 2026 and is supposedly going to generate enough lithium to make a million electric vehicles each year. Carmakers are falling over themselves to get a hold of lithium and cobalt and nickel. These are key ingredients for the battery technology that goes into EVs, electric vehicles. They are key to the power.
And it's not just cars. Lithium is widely used in batteries elsewhere, plus ceramics, glass, lubricants, even pharmaceuticals, although I'm not quite clear how that is. Clearly, though, cars have captured everybody's attention, and that's because lithium ion batteries are the best type of rechargeable battery. They're lightweight. They store a lot of energy in a small space. And that makes lithium ion batteries ideal for use in electric vehicles.
And a key element is their energy density. That's the amount of energy per unit of weight, pound for pound. Lithium is far better than other types of batteries, and that again, makes it ideal for use in EVs. Lithium batteries also last longer than other types of batteries, and that means you can charge them over and over again before you've got to replace them.
And they're cheaper to operate than gasoline vehicles. They cost less than buying gas. You know, charging your electric battery costs less than buying gas. And there are fewer moving parts, which means less maintenance and repairs. And so now you know why electric vehicle sales are skyrocketing. There were 2 million sales of electric cars in 2018. By 2040, it'll hit 54 million. Now, it all sounds great, but there's a problem.
And the problem is that lithium is relatively rare. Most of it is in Chile, Argentina and Australia. So Nevada's mine is a big deal. And now you know why General Motors is investing $650 million to get their hands on as much lithium as they can. And I kind of doubt that they're going to share any of it with Ford.
And, yes, there's an investment opportunity here with everybody scrambling to buy lithium that would argue that lithium prices are going to rise. And so there is the Lithium and Battery Tech ETF from Global X ETFs. The symbol is LIT. You can learn about the Lithium and Battery Tech ETF at Global X ETFs.com. The link is in your show notes or ask your financial advisor.
Coming up next week, next Wednesday at 2 p.m. Eastern, I'm going to be hosting a one hour webinar on crypto SMAs. What's an SMA? A separately managed account. These are increasingly popular with financial advisors. They offer substantial benefits and advantages you don't get from ETFs, and you'll discover why a lot of financial advisors really like them. And now if you are a financial advisor, you'll discover that there's a crypto SMA. So come to this webinar, you'll discover how crypto SMAs work, how to gain access to them, and how you, as a financial advisor, can use them to serve your clients better. I'll be interviewing Matt Hogan, the Chief Investment Officer at Bitwise Asset Management and Chris King, the CEO of Eaglebrook Advisors. This webinar is designed for financial advisors, but everyone is allowed to attend you too. You can register for the webinar at DACFP.com.
-----