How to invest in the Lithium-Ion Battery Revolution

As widespread economic turmoil in the first decade of the 21st century resulted in the broad destabilization of many traditional investment products, alternative investment options began to realize an increase in popularity among investors who may not have otherwise strayed from established investment practices under previous markets.

 

Speculation in metallic or base Lithium is an example of such a trend. 

 

There is a consistent increase in  demand for lithium metal due to the widespread adoption of lithium batteries in emerging technologies. Lithium batteries have become a preferred power source for energy-hungry devices such as cell phones and new markets such as electric cars.

 

Current projections of the global market for lithium-ion batteries range from $26 billion in 2023 (Navigant Research) to $33 billion in 2019.

 

 

 

Li-ion batteries are being used in many applications from Electric Vehicles, mobile phones, Laptops, digital cameras, power tools, Energy storage systems and many more.

 

The Global lithium-ion battery market was valued at $30,186.8 million in 2017 with projections to grow at a CAGR of 17.1% from 2018 to 2025 reaching $100,433.7. Lithium-ion (Li-ion) batteries are rechargeable batteries with high-energy density and is used predominantly in portable equipment. Exponential growth in use of these batteries is expected due to the increase in use in smartphones, tablets/PCs, digital cameras, and power tools with further demand for Li-ion batteries driven by the automobile industry. The demand for electric vehicles is expected to drive the demand for Li-ion batteries. Many automobile companies are investing in new factories for electric vehicles that will use Li-ion batteries due to the small size, lightweight and energy density compared to alternatives like nickel metal hydride batteries.

 

With China leading in the adoption of electric vehicles in circulation the number of electric vehicle sales was greater than one million. According to the International Energy agency, Electric vehicle ownership is expected to grow beyond 125 Million and could potentially reach 220 Million by 2030. The IEA estimated a significant increase from the previous year of 54% to 3.1 Million electric vehicles in use in 2017. Although China contributed to the majority of electric vehicles on the road, Nordic countries such as Norway, Sweden, and Iceland led in market shares.

 

The shift to electric cars will come faster and in a more pronounced way, fueled by the diesel demise in Europe, battery technology advancements and regulation in China and Europe,” said UBS analyst Patrick Hummel.

 

 

In order to understand what to invest in, we need to look at the underlying technology, manufacturing process and supply chain involved.

The video explains how a lithium-ion battery works and the materials involved. The most commonly used materials used in batteries are Lithium, Aluminium, Copper, Nickel and Cobalt.

An easy way to invest in Lithium and battery technology is to find an ETF that tracks a collection of securities like stocks specifically targeted at this market. The Global X Battery and Lithium ETF invests in the full lithium cycle, from mining and refining the metal, through battery production.

 

Original story: – The Li-ion battery revolution, how to invest in the trend

 

 

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