Yesterday, I listened to a couple of popular investors on a finance podcast. One mentioned that a growing trend in the auto industry is towards battery technology. In fact, the majority of new vehicles produced over the next decade will likely be electric vehicles. One problem, the batteries in the vehicles contain nickel and while there is not currently a shortage of nickel there could be.
Apparently, it takes a very long time to approve new mines. A mining company may need to wait seven to ten years before a mining project is approved. The long approval process could significantly effect the supply of nickel in the next few years if the use of batteries continues at the current pace. One of the investors postulated that the price of Tesla cars could double within a couple of years. My first thought was that I should go out and buy a Tesla now, as an investment.
Surely the large manufacturers are considering the cost and supply of nickel before moving into the electric vehicle business, unless they are forced into the business in a do-or-die way. Care need to be affordable. If the investor is right, the cost increase could put a significant damper on the purchase of electric vehicles by consumers who may not be able to afford the increased prices. Teslas are expensive to start and I don’t know too many people that are willing to fork over $100K for a new car.
Over the next couple of weeks, I’m going to research the nickel market a bit more.