Special Report: Lithium: Invest in the World’s Energy Future

Did you know that tomorrow's oil is actually a metal?

I know it sounds pretty crazy, but the truth is that in the very near future, the majority of our energy will be delivered not through fossil fuels but instead through a very special metal.

It's actually already begun, and I bet that you're carrying evidence of this on your person right now.

You may have already guessed that this is no ordinary metal.

It's the lightest of all metals known to man, and it's also used in alloys to strengthen and lighten things like aircraft wings.

But it's in its atomic structure that the true power of this one-of-a-kind element lies.

You see, it's a key component of modern batteries — particularly the rechargeable kind.

That piece of evidence you're carrying around? It could be a cell phone, a smartwatch, a fitness tracker, laptop, tablet, or any device that you have to charge. There are billions out there today, and each and every one of them contains some of this metal.

Moreover, you know those big hybrid and electric cars that you see on the road every day? Their batteries all depend on this metal to function.

And with the market for large, rechargeable batteries hitting record growth figures and even more growth expected for at least the next decade, this element is rapidly becoming one of the most important industrial metals there is.

It's called lithium, and there's more demand for it right now than there has been at any other time in history.

What's driving this demand?

To put it as plainly as I can: almost everything.

Broad-Spectrum Demand

evolution of the LI-ion marketFrom cell phones, power tools, tablets, and all the way up to electric vehicles (EVs), everything that needs a compact, rechargeable power source relies on lithium in the way that we rely on water and oxygen.

Not since the adoption of gasoline as a general power source has any commodity been this universally necessary.

These charts only tell part of the story of where lithium is heading.

So, to say that we're in a lithium bull market is an understatement. This is what some people in my industry call a super-trend — not at all unlike the oil mania of the early 20th century or the housing mania of the early 21st century.

Lithium batteries have never been as essential to the world’s energy industry than they are now. Short of powering individual devices, large-scale energy storage projects are going up all over the globe!

You see, as the world works to move away from fossil fuels, more clean renewable energy sources are being installed. Unfortunately, those clean fuels are also intermittent, and so, energy storage will be absolutely necessary to support the future of energy.

estimated size of the rechargeable battery marketUnlike oil and housing, this commodity is nearly universal in terms of its implications and the sectors that it will affect as we move forward.

Don't Limit Your Profits

The conclusion is simple: Lithium is the energy investment of the 21st century — more so than oil, natural gas, nuclear, solar, or any of the industries that they support!

And with Tesla starting production of its Gigafactory 1 and promising to nearly double the entire world's rechargeable battery production capacity, you better believe that demand is still ramping up.

The end goal for Tesla has always been to lower the cost per watt of lithium-powered vehicles to make them cost competitive with traditional gasoline-powered cars, even with low gas prices like we’ve had for the past year.

And the company is well on its way to reaching that goal.

It helps, of course, that practically every major carmaker in the world is working on an EV design of its own to keep up with Tesla’s popularity. The revolution will be battery powered.

the cost of lithium-ion automotive batteriesSo, how do you leverage this Everest-sized trend into the best possible profits?

As an oil and gas guy, I never thought I’d be so bullish on batteries, but in cases like this, I would be remiss to stay quiet.

Energy is energy, and in the coming decades, lithium's importance will be growing more and more.

Although there are plenty of young, aggressive companies that could maximize my profit potential on such a clearly indisputable economic trend, I'm always cautious when it comes to risking my money.

Instead of piling my funds into just any miner or speculator, it's of the utmost importance for me to develop a strategy that will benefit from the long-term growth of lithium and its short-term profitability.

As you can see from the images above, EVs will be the biggest driver of this booming market from here on out, and they will account for 35% of all vehicle sales by 2040, according to Bloomberg New Energy Finance.

But the biggest name in this market, Tesla Motors, is notoriously volatile and not a good buy for investors who are looking for steady long-term incomes.

In short, it'll be best for investors to follow two different plays on this one.

With huge new demand coming from Tesla's Gigafactory 1 and all of the other applications this commodity is used for, my first pick for lithium is the long-term and highly rewarding Global X Lithium & Battery Tech ETF (NYSE: LIT).

LIT 1

The fund is a great way to track the overall lithium market, while investment and demand grow over the next few years and into unparalleled territory in the coming decades.

It’s already made some amazing gains over the past year. But don’t let that scare you — the growth has only just begun!

Included in the holdings of the Lithium ETF are miners, chemical companies, battery manufacturers, and other industrial companies.

By diversifying the exposure to lithium, the Global X Lithium ETF provides investors with less risk and the potential for long-term rewards. It will be like getting in on the oil and gas index back in 1995 when it traded for $1,000 less than it does today.

However, I understand if you want to take immediate advantage of the power of lithium for your portfolio, so I'll also suggest making an investment in Panasonic Corporation (OTC: PCRFY).

PCRFY1

Panasonic is a longstanding business with a history of profitability. It makes lithium-ion batteries for a smattering of different applications, and it currently supplies batteries for all of Tesla's cars.

This means that if you invested, you'd be a player in the current lithium boom and the growth of lithium as Tesla expands its Gigafactories and companies all over the world boost the demand for this commodity.

As these trends converge, even a die-hard oil and gas investor like me finds enough evidence to want to switch teams.

Good investing,

Keith Kohl
Energy and Capital

Images created by Visual Capitalist.


Energy and Capital, Copyright © 2017, Angel Publishing LLC. All rights reserved. 111 Market Place #720 Baltimore, MD 21202. The content of this site may not be redistributed without the express written consent of Angel Publishing. Individual editorials, articles and essays appearing on this site may be republished, but only with full attribution of both the author and Energy and Capital as well as a link to www.energyandcapital.com. Your privacy is important to us -- we will never rent or sell your e-mail or personal information. Please read our Privacy Policy. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Energy and Capital does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. The publisher, editors and consultants of Angel Publishing may actively trade in the investments discussed in this publication. They may have substantial positions in the securities recommended and may increase or decrease such positions without notice. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.