Electric car revolution brightens outlook for a medley of metals – by Jan Harvey (Reuters U.S. – October 5, 2016)


LONDON – Electric cars such as the Nissan Leaf may look no different from the standard family runaround. But the new materials that go into them could revolutionize the market for metals used in the industry, opening up a new field for commodities investors.

“We identified electric vehicles as an area where we are at an inflection point for demand,” said Duncan Goodwin, portfolio manager of the Baring Global Resources Fund.

Around 12 percent of the fund’s $378.2 million in assets is exposed to materials that are used in electric vehicles. It has investments in New York-listed Albemarle and Australia’s Orocobre, two companies producing lithium, a key element in electric car batteries. Shares in both companies have risen sharply this year.

Governments, keen to push growth in electric cars in a bid to meet their carbon emissions targets, are tempting consumers with perks like subsidies, free parking and tax breaks. Growth in the market is in turn creating an opportunity for commodities investments currently estimated at $235 billion.

But it is not a simple one-way bet. Predicting how much of any metal will be needed to meet demand for electric vehicles in the longer term is tough and advances in battery technology could alter the mixture.

Getting drivers to adopt electric cars remains a challenge – the need to charge them up frequently and time taken to do so have put off many potential buyers.

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