If you remember the 1990s, you likely remember music from Tupac and No Doubt, flying dunks by Michael Jordan, and Bill Clinton’s sexcapades.
You’ll also remember how an incredible piece of technology ruined live events from concerts to little league football games.
That’s right; before phones and iPads, this little piece of work meant that yuppie idiots would elbow their way to the front, blocking your view and disrupting little Ashley’s Irish dance recital just so they could watch it once with Grandma.
It was the Sony Handycam, and no new father worth his salt would cut an umbilical cord without one.
Despite destroying moods and bootlegging Grateful Dead concerts, the 1991 Sony Handycam changed the world forever and in ways no one could possibly foretell. That’s because it was the first to combine a lithium-ion anode layer with cobalt to produce a powerful lightweight battery that could be recharged.
From Sony to Tesla: The Li-ion Roars
Rechargeable lithium-ion (Li-ion) batteries were first developed by Sony in 1991 to solve a specific problem with the company’s Handycams.
Before 1991, the video camera was a huge beast that sat on your shoulder and required a battery pack full of heavy and bulky nickel-cadmium batteries.
Sony needed a small, rechargeable, powerful battery, so it turned to lithium-ion. It was a creation of Dr. Stanley Whittingham, who was working for Exxon, the oil giant. Dr. John Goodenough, an electrochemist at the University of Texas, added a cobalt cathode, and thus Sony added another mass-produced electronic miracle to its trophy case.
As the years went by, Li-ion batteries took over. They are now in cameras, laptops, cell phones, tablets, Roombas, hoverboards, bikes, gardening equipment, drills, saws, chainsaws, lawnmowers, flashlights, drones, and even helicopters, cars, and off-the-grid electric storage. Anything you can think of that you want to unplug is now run on Li-ion batteries.
Massive Creative Disruption
But things are just getting started. Li-ion batteries are creating the greatest market disruption in the energy sector since the ocean ran out of whales.
We are entering an age where Li-ion batteries will become an integral part of both the electric power grid and the automobile industry. This is already happening at an alarming pace.
Every car company on earth is pushing electric and hybrid electric vehicles. Volvo said it is doing away with the internal combustion engine alone. It will go to hybrids and electric after 2019. Norway is working on banning gas-powered cars by 2025!
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Elon Musk and Tesla are building a Gigafactory to mass-produce batteries — recently Musk said he would triple capacity to over three times current world production. But that’s nothing; 35 more Gigafactories are going up around the world in places like South Korea, Japan, Germany, Sweden, and China.
The problem is the world doesn’t have enough supply of lithium. No wonder the Economist magazine called lithium “the world’s hottest commodity.”
Bloomberg writes:
Starting about two years ago, fears of a lithium shortage almost tripled prices for the metal, to more than $20,000 a ton, in just 10 months. The cause was a spike in the market for electric vehicles, which were suddenly competing with laptops and smartphones for lithium ion batteries. Demand for the metal won’t slacken anytime soon—on the contrary, electric car production is expected to increase more than thirtyfold by 2030.
Don’t get me wrong: There is lithium on earth — there just aren’t enough mines to produce it at the quantities needed for the electric vehicle (EV) industry.
This will set up a massive supply shock over the next few years. Not only will physical lithium prices continue to go up, but an estimated $350 to $750 billion will be spent building up new mines.
The good news if you are looking to invest in lithium miners is that though lithium prices should continue to go sky high, they are a small part of the overall cost of an EV.
For example, if lithium prices jumped 300%, the cost of a battery pack would only go up 2%. EV producers don’t care about cost so much as locking in a long-term supply.
This makes for an exciting and potentially profitable investment opportunity.
My friend and associate Keith Kohl has done extensive due diligence on this subject and will have a fine-tuned and useful report out tomorrow. Keep a weather eye open — you don’t want to miss this one.
For your profit,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
