VIDEO: Biden Supercharges The EV Market
Welcome to my video presentation for Friday, August 6. This accompanying article provides greater details about the video’s investment theme.
President Biden just gave electric vehicles (EVs) a very big boost. Below, I’ll show you the shrewdest way to profitably leverage the trend (and it’s probably not what you think).
The White House on Thursday announced that the Environmental Protection Agency and Transportation Department were imposing new mileage and anti-pollution standards, part of the administration’s goal to slash U.S. greenhouse gas emissions in half by 2030. The new Biden fuel-efficiency standard will be 52 miles per gallon by 2026.
Biden signed an executive order that sets a target for half of all vehicles sold in the United States to be electric by 2030, up from only 2% last year. The auto industry has agreed to the White House’s target for new EV sales.
“When I say electric vehicles are the future, I’m not joking,” Biden wrote in a tweet on Wednesday evening. “Tune in for big news tomorrow.”
Ambitious government initiatives from the Biden regime continue to propel the stock market higher. Biden’s $1.2 trillion infrastructure package, now under consideration in Congress, stands a good chance of passage. The combination of fiscal and monetary stimulus is keeping investor moods bullish. The financial markets are awash in liquidity, a positive factor that helps outweigh COVID Delta fears.
On Thursday, the Dow Jones Industrial Average rose 271.55 points (+0.78%), the S&P 500 jumped 26.44 points (+0.60%), and the tech-heavy NASDAQ climbed 114.62 points (+0.78%). The small-cap Russell 2000 increased 39.69 points (+1.81%). Transportation-related stocks were among the top performers. The Global X Autonomous & Electric Vehicles ETF (DRIV), the benchmark for the EV industry, jumped 1.12%. The S&P 500 and NASDAQ closed at record highs.
The surge this year of the Russell 2000 underscores Wall Street’s confidence in the durability of the economic recovery. Small stocks tend to outpace their larger brethren when economic expansion picks up steam.
The Labor Department reported Thursday that initial jobless claims declined to reach a total of 385,000 for the week ended July 31, in line with estimates. Continuing claims fell sharply, plunging by 366,000 to 2.93 million, a pandemic-era low.
The Labor Department released a separate jobs report Friday that showed an increase in non-farm payrolls of 943,000 for July, compared to 865,000 expected. The headline unemployment rate fell to 5.4%, versus 5.7% expected and 5.9% in June. Average hourly earnings, month-over-month, came in at 0.4% vs. 0.3% expected and 0.3% in June.
On Friday after the opening bell, U.S. stocks jumped higher on the latest jobs report. The stock market pessimists continue to eat crow.
EVs: in the pole position…
The EV boom is one of the biggest investment opportunities available. Environmentalists see cleaner EVs as salvation for the planet and an effective way to reduce the carbon footprint of transportation, to help fight global warming. Investors see the opportunity to invest relatively early in a breakthrough technology that will soon become the money-making status quo.
Between 2019 and 2027, the size of the global EV market is projected to increase almost five-fold to reach $803 billion U.S. dollars by 2027 (according to data from research firm Statista). This translates to a compound annual growth rate (CAGR) of more than 20% between 2019 and 2027.
The Biden administration also contends that its EV initiative has a foreign policy component. The concern in Washington is that China is outflanking the U.S. when it comes to EV development and production.
The EV segment enjoys supercharged growth. General Motors (NYSE: GM) announced in January 2021 a switch to only EVs by 2035.
Automotive pioneers in early 20th century Detroit behaved a lot like Silicon Valley entrepreneurs today. They tinkered with exciting new technologies, regularly hopped from one company to the next, launched start-ups and spinoffs, and challenged conventional wisdom. The cross-fertilization of ideas and products in the Motor City revolutionized society.
By making a big bet on EVs, Detroit is trying to regain its old mojo. However, for the best play on the innovative aspects of the auto industry, don’t think carmakers. Think lithium.
Lithium is a silver-white metal that’s crucial for a variety of industrial applications. The biggest growth driver for lithium is the demand for lithium-ion batteries used in EVs. The following chart tells the story about the long-term demand for these sophisticated batteries:
Some pundits refer to lithium as “the new gasoline.” Renewable energy also requires a massive amount of lithium.
According to market research firm IHS Markit, lithium-ion batteries represent the fastest-growing form of energy storage and will be a part of about 80% of storage installations by 2025.
Lithium is among a slew of commodities that are poised for huge price gains as demand for commodities explodes. Global infrastructure projects also will boost the need for lithium.
However, demand for lithium is outstripping supply, which is great news for the companies that mine and process the metal.
For details about America’s number one lithium play, click here now.
John Persinos is the editorial director of Investing Daily. Send your questions or comments to email@example.com. To subscribe to his video channel, follow this link.