Electric Car Demand Is in Overdrive

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For most drivers, electric vehicles (EVs) are still something of a novelty.

You’ll see someone with one every now and then, but they’re still fairly niche.

It certainly doesn’t help that Australia is lagging behind in uptake either. Like most new technology, we’ve been slower to adopt it compared to the US and Europe.

Granted, a big reason for this is because of the necessary infrastructure required for EVs. As a large and sparse nation, setting up charging stations across the country isn’t easy or cheap.

In time, though, as costs come down, Australia will catch up.

After all, with the way things are shaping up between automakers, EVs are quickly becoming a hot commodity. And I’m not just talking about Tesla here.

Stalwarts of the car industry, like General Motors, Ford, and Volkswagen are all betting big on electric. The latter, for example, has recently divulged its plans to build new battery and EV factories in the US.

General Motors, on the other hand, has been saying for a while that it plans to go completely electric by 2035. And while that is certainly quite a way off, this sort of commitment is telling.

But perhaps, most surprising of all, is the kind of interest Ford is seeing for its electric vehicles…

All American, all electric

See, Ford makes most of its money from its F-Series.

In particular, the F-150 pickup truck is easily the company’s most iconic product right now, the kind of vehicle that is the embodiment of a huge gas-guzzling, all-American truck. Something that you’re likely to find in the more rugged parts of the US than its sprawling cities.

For that reason, when Ford decided to test the waters with an electric version of this truck, you can probably understand why they weren’t expecting a big response. But they couldn’t have been more wrong.

As Road & Track recently reported, demand is not an issue:

With 200,000 reservation holders tapping toes in line, dreaming of dusting gasoline trucks, we may take the Ford F-150 Lightning as an example, illustrating just how badly many Americans wanted an electric pickup.

So many that even Ford was caught off guard, and is racing to double Detroit production to 150,000 annual units by next year. Darren Palmer, Ford’s vice-president for electric vehicle programs, told me Ford also aims to roughly triple Mustang Mach-E production, to 150,000 yearly.

That’s what happens when EVs go from short-range, compromised econoboxes to fully-realized marvels that make gasoline versions seem nearly obsolete, in everything from performance, pollution and NVH to ownership costs for fuel and maintenance.

Ford has even had to step in and stop people from reserving the electric truck. They just simply can’t keep up with demand right now.

A great sign for EV adoption, but also a worrying insight into how hard it is to make these vehicles right now. Shortfalls in the supply of batteries and battery metals in particular is proving to be a big challenge.

And that’s precisely why investors can’t afford to ignore the ongoing lithium boom.

Insatiable appetite for white gold

Venkat Srinivasan, the director of Argonne Collaborative Center for Energy Storage Science (ACCESS), is particularly worried about the mismatch between supply and demand for EV’s. As he states:

We just don’t have the manufacturing capacity to match the demand,

And even if we had a magic wand, we don’t have the mines and materials to supply these things, so there’s a long-term materials challenge.

It’s precisely for this reason that we’ve seen such a huge boom in Australian lithium miners. A boom that many have written off as a bubble, but is still showing no signs of fundamental breakdown.

Last Wednesday, for example, Liontown Resources signed another major deal with Ford — an agreement that comes on the back of a similar arrangement with Tesla.

This development really should hammer home just how resilient this lithium narrative is.

My colleague Callum Newman can certainly tell you all about that. He has been following this Tesla money trail for a while now, isolating the best producers being handpicked by the leading EV maker.

As he likes to call them: ‘Elon’s Chosen Ones’. They’re miners that could be the key to resolving the huge shortfall in battery metal supply. But don’t take my word for it, you can read all about these exciting stocks and Cal’s thesis for them right here.

Because it seems that Cal was even more on the money than he thought.

Now it’s not just Tesla chasing Aussie miners for white gold, it’s all the major automakers…

Regards,


Ryan Clarkson-Ledward Signature

Ryan Clarkson-Ledward,
Editor, Money Morning

Ryan is also co-editor of Exponential Stock Investor, 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.

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor…

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