Electric Vehicle – The New Oil
Anti-EV campaigners have claimed that lithium is the new oil, implying that lithium has become a valuable commodity. Also, the global economy will become addicted to it, similar to oil, with similarly disastrous consequences supply shortages, wars, and environmental degradation.
Of course, this is an incorrect analogy. It is a raw material, similar to iron, used to construct a product and recycled at the end of its useful life. In addition, unlike oil, it is not poisonous or hazardous to the environment. Although current lithium extraction methods do have negative environmental impacts. The catch is that lithium-ion batteries don’t use all that much lithium. Only about 2 percent of a battery cell by volume, according to Elon Musk. However, the same headline can have two opposing meanings. This is why reading an article before sharing it with the rest of the world is always a good idea. A group of Morgan Stanley analysts recently stated that batteries are the new oil. However, they did not mean batteries will cause environmental disaster; instead, the opposite was true.
Morgan Stanley
Battery technology, like petroleum in the twentieth century, is poised to reshape the global economy. The changes will take several decades to manifest, transform almost every aspect of human society, and present limitless investment opportunities. Like oil in its day, Batteries are and will make many people rich, wealthy, RICH!
Morgan Stanley describes the emerging battery ecosystem as a “cross-asset” space that can potentially transform many industries. The emerging battery economy is a story about battery-electric vehicles becoming vastly more cost-effective and capable than internal combustion engine vehicles. Aside from its direct application to electric vehicles and the global battery industry is at the crossroads of equity sectors, commodities, and government policy.
Morgan Stanley lists several industries that it believes will benefit from the upcoming battery boom. The list includes Tesla (TSLA), as well as battery companies Panasonic (PCRFY) and QuantumScape (QS). Raw material suppliers Albemarle (ALB) and Glencore (GLCNF), as well as heavy equipment manufacturer Komatsu (KMTUF), electric utility Norsk Hydro (NHYDY), and semiconductor supplier Analog Devices, are all potential winners (ADI).
Oil Prices Edge Higher
Oil prices rose for the third consecutive session on Thursday due to positive developments surrounding COVID-19, despite China imposing new travel restrictions and Australia reinstating regulations to combat rising cases.
West Texas Intermediate crude futures in the United States rose 10 cents, or 0.1 percent, to $72.86 a barrel, following a 2.3 percent rise the previous session.
Brent crude futures rose 8 cents, or 0.1 percent, to 75.37 per barrel, adding to a 1.8 percent gain in the previous session.
A weaker US dollar boosts oil markets by making commodities more affordable to those who hold other currencies. The dollar fell to a one-week low. Oil’s rise has occurred despite governments reimposing various restrictions to slow the spread of Omicron. The Chinese city of Xian ordered its 13 million residents to stay at home on Wednesday. Scotland imposed gathering limits for up to three weeks beginning December 26th. Two Australian states reimposed mask mandates as cases increased.
