Earlier this week, Tesla CEO Elon Musk asked his 52.5 million Twitter followers what the future would bring.
For the tycoon, that could mean a £ 9 billion bonus thanks to soaring sales of Tesla models, which, like other electric cars, are becoming increasingly popular.
The battery technology that powers these vehicles is seen as a way to cut CO2 emissions – the green goal now being pursued by the US, UK and other governments.
The UK plans to end sales of all non-electric cars by 2035. But, despite its environmentally friendly properties, does this technology also have disadvantages for those seeking more ethical investments?
By next year, up to 500 different types of electric vehicles could be available worldwide, according to BloombergNEF data.
According to Aanand Venkatramanan, Investment Director at Legal & General Investment Management, there are already at least 100 electric vehicle manufacturers in China, underscoring the speed of the transportation revolution.
This is picking up speed as the cost of batteries goes down and storage density improves. Automakers are aiming for an 80 percent charge in 15 minutes – an acceptable wait, apparently.
So great is the excitement over the advances in battery technology that will drive this revolution that QuantumScape’s stock price is up 22 percent this week.
The mysterious US company is working on the next generation of solid-state batteries that should offer faster charging times. These batteries, believed to be more environmentally friendly, should allay the “range anxiety” (concern about how far a car can go on a single charge) that can put off buyers. QuantumScape shareholders include Microsoft founder Bill Gates and Volkswagen, who plan to build 25 million electric vehicles by 2030.
Given the demand generated by these ambitions and the plans of other automakers, the large battery market could be valued at $ 109 billion by 2024, up from $ 64 billion in 2019. This forecast doesn’t take into account rapid sales-expansion of energy storage for renewable energies, which also relies on this energy source to release energy when customers need it.
If you think battery technology could add a spark to your portfolio, you might consider companies the main beneficiaries of the move to electric vehicles. These include Panasonic, Samsung, the German company Varta – and of course Tesla, although the share price has risen by 351 percent over a year. You can be exposed to the stock through funds and trusts like Baillie Gifford American and Scottish Mortgage.
Also on the list are the Korean LG Chem and the Chinese Catl (Contemporary Amperex Technology). These two battery manufacturers are opening giant factories in Europe.
If you want to put money into UK businesses that are taking advantage of the gasoline to battery transition, your options are limited. Only one gigafactory appears to be being built in the UK at the moment.
The start-up Britishvolt wants to build a plant in Blyth, Northumberland. The company may go public soon, but in New York via a Spac (Special Purpose Acquisition Company).
The 12-month rise in the share price of Ilika, listed on the Aim, by 495 percent shows the willingness of investors to support the British.
This pioneer has received a grant from the government’s Faraday Battery Challenge to develop solid-state batteries through partnerships with Honda, Jaguar Land Rover and McLaren Automotive, suggesting that further appreciation in the share price may be possible.
The complexity of what insiders refer to as “battery chemistry” suggests that for some, a specialty fund might be the best route into this risky area. Legal & General’s Battery Value Chain ETF (Exchange Traded Fund) is based on a stock index created by Venkatramanan.
Going Green: This month BMW promised that its solid-state technology will produce the “greenest car in the world” by the end of this decade.
Its components include the Australian lithium miners Galaxy and Pilbara, the Japanese Toshiba and the motor giants BMW, Daimler, Renault and Tesla.
This month BMW promised that its solid-state technology will produce the “greenest car in the world” by the end of this decade.
It will be attractive to investors who prioritize sustainability. But putting money into this sector is now a bet that such promises can be kept.
While battery technology is key to reducing CO2 emissions, it has a darker side.
Tesla and most other brands are making an effort to improve their standards, but they continue to use lithium-ion batteries, which contain cobalt, lithium, and nickel.
The companies that mine these metals have a report on the environment and the often poor labor rights, and the involvement of child labor in the supply of cobalt from the Congo is controversial.
The price of this metal has increased from $ 30,000 per ton to $ 49,500 this year due to the switch to electric cars. They promise to improve. However, many potential buyers can be deterred, so investors may want to push for faster changes.
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