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The Rare Metal Solving Tesla's Biggest Challenge (Hint: It's Not Lithium or Cobalt)

Written by Jason Stutman
Posted February 16, 2018 at 7:00PM

Electric vehicles are the wave of the future!

It’s a declaration we’ve been hearing for over a century by now, as early as the 1890s when electric cabs seemed to be taking over American city streets.

These electric cabs, largely financed by entrepreneurs like Isaac Rice, provided many advantages over their gas-guzzling competition. They offered smoother and quieter rides, didn’t require you to work a clutch, and didn’t leave everyone in your wake covered in thick exhaust.

In fact, these advantages were so great that by the turn of the 20th century, the number of electric vehicles in the U.S. actually outnumbered those powered by gasoline. The makeup was roughly 40% steam, 38% electric, and 22% gas, with over 33,800 EVs on the road at the time.

This “golden age” of electric vehicles, however, was clearly short lived. EV sales peaked in the early 1910s, only to be thrown to the wayside as combustion engines took over the auto industry.

Despite their many advantages, EVs simply couldn’t keep up in terms of function and scale. By the 1920s, infrastructural improvements to roadways demanded vehicles with longer ranges and faster speeds than EVs could offer.

The discovery of large petroleum reserves further exacerbated the problem, and, as combustion vehicles continued to gain power, efficiency, and ease of use, America quickly left its electric automobile culture behind.

The Return of the Electric Vehicle is Coming

Fast-forward a full century, and electric vehicles have yet to make their comeback, but progress is undeniably being made, and sentiment is spreading that the day of EV reckoning is fast approaching.

The growing fervor around electric vehicles can be attributed to a collection of factors, an obvious one being the recent ambitions and accomplishments of Elon Musk and his darling motor company Tesla Inc. (NASDAQ: TSLA).

Regardless of how you feel about the pricing on the stock, it’s simply undeniable that Tesla has managed to change the public perception of EVs for the better. What was once considered a wimpy environmentalist toy is now a high-performance and sporty automobile.

With these cars now hitting 0–60 in as little as 2.3 seconds, it would suffice to say that the speed barrier once faced by electric vehicles is well behind us. With 900+ lb.-ft. of torque, electric vehicles are redefining the idea of American muscle.

Yet if you step outside right now, you still won’t see EVs lining the streets. EV market share in 2017 was just 1.16% in the U.S., a far cry from their penetration during their golden age over a century ago. Even at their epicenter in California, just one in every 20 cars is electric.

There are a number of reasons one can point to for why this is the case. Production still needs to scale to increase supply and reduce cost. That much is obvious enough.

But even if production weren’t an issue, electric vehicles still wouldn’t take over American roads, at least as they’re built today. Despite the incredible recent advances in EV tech, there is still one more challenge the industry will need to overcome before taking back the crown from combustion engines.

The Final EV Hurdle: Time to Charge

While EVs have dramatically increased their range over the last 100 years thanks to the implementation of metals like lithium and cobalt, the time to charge these rechargeable batteries remains embarrassingly slow.

Tesla’s Model 3, for perspective, will charge at about 31 miles every hour it’s plugged in. Filling up your gas tank takes a couple of minutes.

Now, for people who have access to a carport or garage, this isn’t so big of an issue. If you can park your car at home and charge overnight, a slowly charging vehicle isn’t too much of a hurdle.

But the reality is that only 63% of all housing units in America have a garage or carport, and one in four say their garage is too cluttered to fit their car. That works out to 47%, less than half, of all housing units with a place to charge an EV overnight.

The problem only gets worse when you consider there are 1.9 cars, on average, to every housing unit in the U.S. Depending on the size of the carport, you can’t charge two vehicles at once.

This is an issue that’s particularly challenging for renters, as only 37% of renting housing units have a garage or carport. Elon Musk himself recognized this challenge in a recent shareholders call:

So most millennials living in apartments rather than homes, what can we do to make it easier to own and charge a Tesla without a garage, so we are establishing supercharging locations a lot more in cities… we are going to make sure that there is a place to charge your car, even if you live in an apartment. One of the key things for apartments is to manage the power is if you got a lot of cars parked in your garage... where all cars are drawing maximum power at the same time, then you need a crazy amount of power.

Musk’s answer to the charge time is the Tesla Supercharger network, which is exactly as the name describes: a network of fast-charging stations for electric vehicles.

But even with Tesla’s Supercharger, a Model S will take 75 minutes for a full charge. It should go without saying that no one has the patience to sit at a charging station for that long, and Tesla recognizes this fact.

Here’s Tesla executive Jonathan McNeill from an August 2017 conference call:

We've actually tested cells and even full battery packs that can do something like a 15 minute recharge, but to date the tradeoffs to achieve that we don't feel are the right ones for the customer overall.

You end up sacrificing on overall cost per kilowatt-hour and also sacrificing on energy density in the product... there's ongoing work to reduce those tradeoffs and make it better still.

Therein lies the final looming technological hurdle of EVs before they reach the mainstream: the ability to charge quickly without sacrificing range.

Fortunately for the EV industry, the solution is coming, and in the form of a rare energy metal most people have never even heard of before.

That’s good news for people who can’t wait for the proliferation of electric vehicles, but even better news for investors who know the junior miners digging this rare metal up.

Keep an eye out this week, as we’ll be detailing that opportunity shortly.

Until next time,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and The Cutting Edge. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.

Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.

Outside the office Jason is a lover of science fiction and the outdoors, and an amateur squash player at best. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.

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