Death of the Muscle Car?

At only 15 years old, I bought my dream car…

A 1970 Ford Mustang Mach 1, grabber orange, with the 351 Cleveland small block V8 four-speed manual transmission.

But, before you get jealous, the Mach 1 I bought was in poor condition… nowhere near the one above. It wasn’t running and needed thousands of dollars in repairs. 

I bought the car from a friend of my grandfather who owned an auto shop. I paid just $2,000 for it, which I had saved up doing various jobs. It was almost my entire life savings at the time. But the Mach 1 was my dream car… my dream car at 15 years old, at least. And my teenage fantasies exploded with the possibilities of driving this hell-on-wheels around town.

I imagined drag racing, spinning out the tires, loud stereo blaring, pretty girl in the passenger seat… basically everything you don’t want your teenager doing, but in this badass muscle car.

I never did get the Mach 1 running.

It just sat under a cover in my parents’ driveway. And, in retrospect, that was probably for the best. Fact was, the car simply needed too much work that I couldn’t do myself or afford to get fixed by a mechanic and body shop. And there was no way my parents were going to give me any money for any car, let alone to repair a muscle car. So I ended up selling it just a few months later for $2,500.

I actually made money on the car, and my parents were happy I wasn’t going to “wrap the damn thing around a tree.”

When I turned 16 and was able to get a driver’s license, I put the money I made toward a car that actually ran: a 1985 Dodge Colt, rusted maroon, with a four-cylinder whocares and three-speed automatic trans.

Even though this little car got me around, I still of course longed for the Mach 1.

I mean, are you kidding me? Driving this thing was nothing like my fantasies in the Mach 1. In my eyes, the Mach 1 was a brutal, wild savage of the road, a snarling and growling beast, always stinking of gasoline and burnt rubber. I thought this turd on wheels was never going to get me laid.

…And it never did.

Death of the Muscle Car?

Today people simply want more practical vehicles. Of course, there will always be a small group of gearheads who appreciate muscle cars. But the majority of the population wants better fuel economy and easy maintenance for their everyday cars. And they’re quickly finding all that in electric vehicles.

Right here in America, the home of the fuel-guzzling muscle car, EV sales have grown at a 32% compound annual growth rate (CAGR) over the past four years.

Globally, growth has been even stronger. Since 2013, global EV sales have increased about 400%.

But this is a revolution that’s only getting started.

Fueled by a decline in production costs, increasing public demand, zero-emission regulations, and government incentives, the global EV market is expected to grow at a CAGR of close to 23% through 2021. The IEA says:

Assessments of country targets, original equipment manufacturer (OEM) announcements and scenarios on electric car deployment seem to confirm these positive signals, indicating a good chance that the electric car stock will range between 9 million and 20 million by 2020 and between 40 million and 70 million by 2025.

Soon fully electric motors will replace the combustion engine the same way the electric light bulb replaced the oil lantern. And today’s investors will be the beneficiaries of major gains.

Now, you may know that the electric vehicle revolution can’t happen without lithium. That’s of course because lithium is the main component of the lithium-ion batteries needed for EV power storage.

And you’ve probably heard a lot about lithium in the past few years as a result. But there’s one other strategic metal that will be absolutely necessary for the revolution: cobalt.

In short, this silvery-blue metal is used in battery cathodes to improve battery life, and therefore increases an electric vehicle’s driving range. And, of course, consumers are always going to want better mileage.

But there’s a big problem with cobalt resources…

Most of the world’s cobalt resources are located in geopolitically unstable regions, like the Democratic Republic of Congo. Time and time again, we’ve shut down corrupt governments or taken over such resources. And with the demand for EV growing like wildfire, auto manufactures are now racing to secure supplies of cobalt from anywhere they can.

Reuters recently reported that Volkswagen secretly submitted proposals to cobalt providers to supply the metal for up to 10 years.

In a bid to pull market share from Tesla, Volkswagen had previously said it plans to invest some $24 billion in EVs by 2030 and will produce 3 million zero-emission vehicles a year by 2025. And it will need all the cobalt it can get its hands on.

The demand for cobalt is expected to skyrocket in the coming years due to the EV revolution. And miners of this material are going to soar.

My colleague Keith Kohl is all over the cobalt story right now. He’s ahead of the game with several cobalt miners and explorers already in his portfolios. And he’s discovered many with cobalt projects outside of the unsafe regions.

Right now, the cobalt story is flying under the radar. But that won’t last. I highly urge you to get the full story on cobalt from Keith. This is truly a once-in-a-lifetime opportunity. After the mass media really starts talking about the need for cobalt and the market truly understands the problem with resources, prices are going to soar, and it’s going to be too late.

Don’t delay. Check out Keith’s most recent cobalt presentation now.

Until next time,

Luke Burgess

As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.