In today’s Money Morning…you can’t ignore the competition…2021: A potential lithium bonanza…both stocks are absolutely flying…and more…
CES is back!
The annual electronics and tech roadshow where all kinds of companies share their latest whacky innovations. A mix of visionary and downright absurd ideas, products, and concepts.
Plus, for the first time ever, the show has gone totally digital. Thanks to the still ongoing pandemic. Which is fantastic news for anyone (like myself) following along from home.
Because just like every year, the things I’ve seen so far continue to blow me away. With some incredible presentations captivating tech enthusiasts around the world.
And I expect, one of the most talked about presentations will be General Motors…
Yes, GM (the renowned carmaker) has made a huge splash at CES. Sharing their tech-centric vision for the future of the automotive industry. Unveiling a whole suite of new vehicles for the distant and near future alike.
Flying cars, driverless pods, and an entire business devoted to delivery vehicles were some of the big highlights. Ventures that GM clearly believes will ensure the company’s future for decades to come.
But, as incredible as these ideas are, it is the way they are powered that caught my attention.
See, as far as I can tell, everything GM unveiled at CES is electric. Relying on battery power to run not only the pipedream flying and driverless cars — but also a dozen new ‘standard’ vehicles over the coming years.
It’s pretty damn clear that GM is going all in on the electric vehicle trend…
You can’t ignore the competition
Now, honestly, this isn’t all that surprising.
In fact, GM has been working on electric cars for years now. They even have a decent model available on the market known as the ‘bolt’. Which, as shown at CES, is getting another revamp under the Chevy brand this time around.
However, it is also clear that GM is taking electric vehicles far more seriously than ever. Which doesn’t take a genius to figure out why.
It is near impossible to ignore what Tesla Inc [NASDAQ:TSLA] did last year. Defying all logic and reason with its incredible ascent up the NASDAQ. A move that has recently made Elon Musk the richest man in the world, according to some reports.
For that reason, I expect every carmaker, not just GM, will have done a lot of thinking about EVs. Seeing just how much investors, and the public for that matter, have been captivated by this electric infatuation.
Granted, I’m not suggesting Tesla is the sole reason for the auto industry’s move towards electric. That would have happened with or without them — but I think it is reasonable to assume they’ve helped speed up the process.
GM and the rest of the ‘traditional’ carmakers have some catching up to do. Not in terms of their actual output, but purely in terms of their ambition. As well as a dash of PR and marketing, perhaps.
My point is, like it or not, electric is clearly the way forward for all carmakers. A megatrend that has been a long time coming.
That’s why, as an investor, you can’t afford to ignore it. Because even if Tesla’s returns defy all logic, it signals a shift that you can use to leverage gains from elsewhere.
2021: A potential lithium bonanza
The obvious link to this looming EV boom is, of course, lithium. A mineral that has long been coveted for its importance in the batteries that power these cars.
It’s a narrative that has been parroted about ever since the 2016/17 boom of lithium miners on the ASX. Back when Galaxy Resources Ltd [ASX:GXY] and Pilbara Minerals Ltd [ASX:PLS] where touted as the next big things in mining.
Come 2019 though, lithium was in the doghouse. With the EV revolution that was set to drive demand for the mineral clearly not as close as everyone had hoped.
Investors were burned, companies lost a lot of money, and some even folded entirely.
Now though, with a massive surge in late 2020, lithium is back. With a lot of the miners, including the two I just mentioned, netting investors some remarkable returns. Take a look for yourself:
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| Source: Google Finance |
Both stocks are absolutely flying. Which, for anyone familiar with lithium miners, shouldn’t really surprise.
We’ve seen plenty of speculation drive prices higher in the past, like the 2016/17 boom and bust I mentioned. But what makes this latest run more impressive is the actual substance behind it.
As The Sydney Morning Herald reported last week, emphasis mine:
‘Managing director Ken Brinsden said the company [Pilbara Minerals] shipped a record-breaking 70,609 dry metric tonnes of spodumene concentrate from Western Australia’s Pilgangoora mine for the December quarter, beating its target.’
On top of that, Brinsden also notes the price of lithium is up 35% from its August lows. Which is good news for all lithium miners. Especially as Australia is the top exporter of the stuff!
More importantly though, demand should keep rising. Because as GM’s lavish tech show underscores, the future of the automotive industry is almost all electric.
So, keep an eye on the lithium miners — both big and small. Because while the boom is already underway, it looks much more sustainable than ever before.
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks. For information on how to subscribe and see what Ryan’s telling subscribers right now, click here.
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