Electric vehicle stocks could change dramatically over the next few years. Companies that process the materials required could grow and change.
It’s well known that while an electric vehicle is on the road, it’s much cleaner to operate than gas or diesel-powered vehicles. The issues with EVs aren’t about their operation, but about the materials that go into making them. Despite the positive environmental impact and renewable energy used, electric vehicles require many rare earth metals to operate. The batteries, especially lithium-ion batteries, are made of metals that are rare and have depleting resources. This could lead to some changes in electric vehicle stocks that you might not anticipate.
Global Warming: Its Real
Regardless of what some people will tell you, the expelling of harmful emissions into the atmosphere causes the overall temperature in the atmosphere to rise. One of the most effective ways of reducing these emissions is creating factories and transportation vehicles that don’t expel harmful emissions into the air. EVs are emission-free vehicles and changing to them has already had an incredibly positive impact on many large cities. The cloud of smog that used to hang over Los Angeles is no longer visible, and the air quality has improved dramatically.
Driving lower-emission and emission-free vehicles makes a huge difference in air quality, which can lead to fewer breathing-related medical issues, but improved air quality comes at a price, and that price could be the rarity of the metals being mined from the Earth.
The Mining Process Isn’t Clean and Friendly
Mining is an inherently dirty and difficult task that requires workers to spend countless hours underground digging for minerals. Some of the largest plots of the metals being used for EV batteries come from countries in which slave labor and child labor laws aren’t present or enforced. This led to the United States and many European countries enacting legislation to limit and control the countries that provide metals for EV batteries. This is effectively taking something that’s already rare and making it even more scarce.
What Are Rare Earth Metals?
A group of 15 elements that are typically found together and are used in a wide variety of applications due to their magnetic, luminescent, catalytic, and other properties is considered a rare earth metal. These elements are used to create permanent-magnet motors and EV batteries. A large part of the challenge for free nations, such as the United States, is that China seems to have the largest supply of these metals in the world. This has quickly led to China becoming the global leader in developing and utilizing electric vehicles.
As these metals are mined and become more rare, expect electric vehicle stocks to change and the vehicles themselves to increase in price. There could be another change to EVs that will change the landscape of companies in need of investment to make electric vehicle operation better and more functional for the future.
What’s Required?
The future of electric vehicles could depend on a few different things happening. The first and most expected is the ability to recycle or reuse the metals that are used in EV batteries. Its well-known that electric vehicle batteries have a limited lifespan and could require being broken down into the various metals to be rebuilt as a new, rejuvenated battery in the future. This could be where we see a growth in electric vehicle stocks going forward.
Another expected change is the development of better batteries that last longer and provide greater driving distances between charges. The development of solid-state batteries could be the future of EVs and might make them much more capable of traveling as many as 800 miles on a single charge. As battery companies begin to develop these batteries, stocks could split or be offered to all further investments in the EV market.
A third option for EV batteries, and one that’s already being researched is using these batteries for additional lifespans after their use in vehicles is over. Audi has been researching second and third lives for its batteries for many years. They partnered with a German company to develop battery-powered rickshaws using EV batteries and claims these batteries can be further used to power some home appliances as well.
Finally, the last possibility for continual development and growth of the EV market would be discovery of more rare earth metals in areas that haven’t been explored yet. This is the least likely development and growth of electric vehicle stocks.
The future of investing in the electric vehicle market might look bleak at the moment, but could change and grow with new discoveries, the development of improved batteries, and recycling programs that will make it possible for these batteries to be utilized for several years.
