Electric Vehicle Production World Take-Over
The fact is, EVs are taking over the car industry…
According to Bloomberg, 54% of ALL new cars sold will be electric by 2040. That’s over half, under 20 years from now.
This is shaping up to be one of these rare industrial megashifts that build lasting fortunes for investors who see it coming.
Nissan, BMW, Ford, Chevy, Kia, Porsche, GM, Toyota, Volvo, and Volkswagen are all ramping up EV production.
But the real action is in China. The Chinese are buying more electric vehicles than the rest of the world combined.
In 2018, EV sales jumped 83% there. More than half of all electric vehicles now on the road are in China.
And that number is going even higher, because China is banning new auto factories unless they make electric cars.
In fact, China is planning to outlaw gas-powered vehicles completely.
Germany wants to follow suit in the next decade.
England, France, and India won’t be far behind either.
And eight more nations, from Sweden to Sri Lanka, plan to do the same.
Electric Vehicles Expected To Drive Copper Demand
Two things are crystal clear from all this: electric vehicles are going to dominate the future of the auto business… and we are going to need a heck of a lot more copper.
The key players aren’t waiting around for these rules to kick in…
The mad dash to lock up copper supplies is happening right NOW.
Car makers are already feeling the squeeze.
Tesla’s global supply manager says they’re heading toward a serious shortage in the copper they need.
Elon Musk himself has said his company might have to start mining its own copper.
Musk isn’t kidding. Because without copper, the shift from gas-powered cars to EVs will screech to a halt. And that would be the end of Tesla.
The only remotely plausible substitute for copper is silver. But it’s currently over 100x more expensive. At more than $25 an ounce — vs. copper at under 20 cents an ounce — it’s really no substitute at all.
Look, I realize there’s no law saying the world absolutely has to use more copper every year. But unless people are willing to go without new cars, new computers, and a new cell phone every other year, there’s no way around it.
So barring a global economic collapse, I just don’t see demand dropping off.
And in the face of diminishing new supplies, it’s entirely realistic to see the spot price of copper uptrend.
That’s when we’ll see copper ETFs blow up.
If that sounds unrealistic, I assure you it isn’t.
Keep in mind that the mining business is extremely leveraged.
Once you cover your fixed costs, every bit of increase in the price of the metal is pure profit.
That’s why when copper moves even a little, copper stocks surge… and make huge gains for investors.
Value Of Deposit At Various Copper Prices
Mining stock analyst Leigh Goehring predicts that electric cars are going to need so much copper that it could hit $10 a pound!
He makes a good point. Electric vehicles are HUGE copper gobblers.
There is almost a mile of copper wiring in every electric engine. Put it on a scale and it weighs 183 lbs.
That’s almost four times more than the amount of copper in vehicles with gas-powered internal combustion engines.
So every new electric car that rolls off the assembly line uses up a bit more of the world’s remaining copper… which adds to the pressure under prices… and to the tailwind behind any company sitting on untapped deposits.
I don’t think most people realize what a huge deal electric vehicles (EVs) are becoming.
They’re not some feel-good fad for granola-eating tree-huggers. Far from it!