The Underdog in the EV Arms Race

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Photo by Waldemar Brandt on Unsplash

It certainly feels like the auto industry’s future is going to be electric, as top car manufacturers focus on developing robust EV product lines, and new government incentives for EV owners roll out seemingly every week. As these vehicles become more popular, finding the best ways to capitalize on the growth of the industry could be a very profitable endeavor.

While investors tend to gravitate toward the companies that sell these electric vehicles such as Tesla TSLA, another great way to play the trend is by exploring businesses that supply the essential materials needed to craft these cutting-edge automobiles. That way, you don’t necessarily have to choose the big winner of the EV automaker battle but instead can profit from businesses providing essential parts or materials to the major players in the industry.

For example, graphite plays a huge role in the EV revolution, as it makes up 95% to100% of the negative part of batteries. It’s a raw material that is essential for creating an electronically conductive path, which is why it’s the battery mineral with the highest projected demand on the planet. To grasp just how important a material it is, consider the fact that most major EV manufacturers like Tesla would not be able to produce the lithium-ion batteries that power their cars without graphite.

It’s easy to recognize the potential in companies that can produce this valuable mineral, yet many tend to fly under the radar for investors interested in EV exposure. That’s a big reason why Nouveau Monde Graphite Inc NMG, a developing battery material company catering to the EV arms race, is worth exploring. 

Nouveau Monde is a Canada-based mining and technology company with plans to become a strategic supplier to the world’s leading battery and automotive manufacturers, providing high-performing and reliable advanced materials while promoting sustainability and supply chain traceability. 

Since China currently controls 100% of the spherical graphite needed to produce EV batteries, this company stands out as it is building a North America-based vertically-integrated operation, from mine to market. That means sustainable, local and all-electric processing is on the horizon, which is certainly attractive for EV manufacturers who have been relying on China’s tightly controlled supply chain.

Nouveau Monde owns a 100% interest in the world-class Matawinie graphite property located in Saint-Michel-des-Saints, 150 km north of Montréal, Québec. This location has access to exceptional infrastructure and affordable hydropower and could eventually help the company become a leading graphite supplier to EV-makers all over the world.

The bottom line here is that this stock is worth investigating if you are looking for a unique opportunity to gain exposure to the burgeoning EV industry. Graphite is a mineral that is currently mined in Brazil, Africa and China, so a company with a mine based in North America truly stands out. Rooting for an underdog in the EV arms race like Nouveau Monde could end up being a profitable decision, especially given the exponential growth in the demand for lithium-ion batteries. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.