An Explosive Pick for the Battery Gold Rush
[Editor’s note: “An Explosive Pick for the Battery Gold Rush’” was previously published in June 2022. It has since been updated to include the most relevant information available.]
When it comes to investing, I like to do one thing: Focus on the big picture.
The simple reality, folks, is that it’s nearly impossible to predict with any great certainty what’s going to happen over the short term. Inflation could keep rising. Or it may start decelerating. The Federal Reserve may hike rates 10 times. Or it may make a U-turn in the summer. Russia may try to invade mainland Europe. Or it may stop the fighting altogether.
There’s a lot of uncertainty out there right now. So, let’s do ourselves a favor and stop trying to do the impossible. We simply can’t predict how all those risk factors will play out.
Instead, let’s do something much easier. Let’s take a deep breath, and zoom out. Let’s look at the big picture. And let’s realize that while today’s macroeconomic and geopolitical risks may seem like world-enders, they are not…
Just like no macroeconomic risk or geopolitical risk before them was a world-ender.
COVID-19? World kept turning. Great Financial Crisis? World kept turning. Dot-Com Crash? World kept turning.
Lather. Rinse. Repeat. In the big picture, the world, the U.S. economy, the stock market, and humankind in general have a multi-century track record of trumping crisis, after crisis, after crisis.
That’s the big picture.
Forget the Noise
Keep that in mind while stocks throw little tantrums. In so doing, you’ll realize that what you should be doing amid this market meltdown is simply focusing on the long-term technological trends reshaping our world.
I’m talking artificial intelligence, electric vehicles, digital advertising and shopping, robotics, and more. Those trends won’t be derailed, stopped, even slowed all that much by what’s going on in the market today.
Indeed, computers weren’t stopped by Black Monday. The internet wasn’t stopped by the dot-com crash. Nor was cloud computing stopped by the financial crisis.
Ultimately, world-changing trends always end up changing the world – regardless of what happens in the near term.
All that is really a long-winded way of saying that the best current investment strategy is to ignore the noise. Focus on the long-term megatrends reshaping our lives.
And the best such megatrend? The “Battery Gold Rush.”
Batteries Are Everything These Days
When you sit back and really think about it, nearly every technological megatrend out there requires batteries to power it.
Electric vehicles? They run on lithium-ion batteries.
Energy storage systems? They, too, run on batteries.
Artificial intelligence? Built on software, which is run on computers, which are powered by — you guessed it — batteries.
What about smartphones? VR headsets? Charging stations? All those end markets need batteries, too.
Recently, Morgan Stanley (MS) summed it up aptly in a research note, saying:
“We need batteries. Literally everywhere.”
That note was meant to illustrate that the world is about to embark upon a battery infrastructure spending boom over the next decade. Countries and companies alike will need to produce enough batteries to power these tech megatrends.
We couldn’t agree more with that thesis.
Batteries will be the epicenter of our tech-dominated future. Demand for them will increase at exponential rates in the 2020s. But there is not an infinite supply of batteries. If anything, we have a supply shortage right now. Therefore, over the next decade, there will be a battery spending boom. And companies all along the battery manufacturing supply chain will make a lot of money.
It will be a Battery Gold Rush.
And we have a $1 stock to play this decade-long megatrend.
The Forever Battery Is the Holy Grail of This Gold Rush
The “holy grail” of the coming “Battery Gold Rush” will be a special type of battery that I like to call a forever battery. And it’s going to change the world as we know it.
To understand why, we need to take a quick trip back to chemistry class…
OK, so, batteries comprise three things: a cathode, an anode, and an electrolyte. They work by promoting the flow of ions between the cathode and anode through the electrolyte:
Conventional lithium-ion batteries are built on liquid battery chemistry. That is, they comprise a solid cathode and anode, with a liquid electrolyte solution connecting the two.
These batteries have worked wonders for years. But due to the physical constraints of dealing with a liquid electrolyte, they’re now reaching their limit in terms of energy cell density. Basically, that means that if we want our phones, watches, and electric cars to last longer and charge faster, we need a fundamentally different battery.
An Energy Storage Marvel
Insert the solid-state battery.
The name pretty much says it all. Take the liquid electrolyte solution in conventional batteries. Compress it into a solid. Create a small, hyper-compact solid battery that – because it has zero wasted space – lasts far longer and charges far faster.
Of course, the implications of solid-state battery chemistry are huge.
Solid-state batteries could be the key to making our phones sustain power for days… enabling our smartwatches to fully charge in seconds… and, yes, allowing electric cars to drive for thousands of miles without needing to recharge.
That’s why solid-state batteries are dubbed by insiders as “forever batteries.” And it’s why these forever batteries are the holy grail of the Battery Gold Rush.
In the 2020s, companies will gain competitive advantages by using the best batteries. The better the battery, the better the performance of an electric vehicle, phone, energy storage system, etc.
Therefore, there won’t be any rush for old-school batteries built on old tech. But there will be an unprecedented mad dash for these forever battery marvels.
In other words, the Battery Gold Rush of the 2020s will be focused on solid-state batteries.
The Final Word on the Forever Battery
The Battery Gold Rush was always going to happen. But recent developments – specifically, Russia’s invasion of Ukraine unearthing the supply and price fragility of a fossil fuel energy system – have accelerated and enhanced it.
The Battery Gold Rush isn’t something that will happen in a few years. It’s happening right now. And over the next 12 months, it will change the rules of the global economy.
And the forever battery is at the epicenter of this gold rush.
Indeed, they’re the key to making electric vehicles ubiquitous. Once commercialized – which we expect to happen before the decade’s end – these batteries will make every EV far better than every gas-powered car. And the choice for consumers will be obvious: Buy a solid-state-powered EV, or get left behind.
That’s why we’re so bullish on EVs. The batteries that will make them 10X better are just a few years away from becoming a commercial reality. Once that happens, you’ll see EV adoption rates go from ~10% to nearly 100%.
And we have the perfect, potential fortune-making, sub-$5 EV stock to buy today to plug into this coming EV boom.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.