It's Not Just Lithium: Tesla, Rivian, And The Green Revolution Rely On These Precious Metals

At the heart of the green revolution lie Lithium-Ion batteries. They are the lynchpin that enables companies like Tesla, Inc. TSLA and Rivian Automotive Inc RIVN to forge new paths in the automotive industry, electrifying the countries’ vehicles. They allow for efficient energy storage systems that make renewable sources like wind and solar more reliable and effective.

Although much of the focus in the press has been on lithium – and to be sure, it is a critical component – only a small fraction of a Li-ion battery is actually comprised of it. Other precious metals like cobalt, nickel, silver, and graphite are equally important to the batteries and the larger global energy transition.

Cobalt

Cobalt is known for its ability to stabilize battery chemistry and enhance performance. The metal is also essential in devices like the Apple, Inc. AAPL iPhone.

Nickel

Nickel is another essential metal used in battery cathodes. Higher nickel content can lead to greater energy density and longer driving ranges, both of which are highly sought after in the EV market. In fact, Elon Musk recently made a plea to the global mining community to "please mine more nickel."

Silver

Silver plays a crucial role in battery terminals and connectors. It’s an excellent conductor of electricity, ensuring efficient energy flow within the battery system.

Graphite

Graphite, a crystallized form of carbon, is an essential component of EV batteries. In fact, by weight, it is the single largest component. The metal is used in the anodes of the battery.

Future Trends

The future of electric vehicles holds exciting possibilities. Researchers and engineers are constantly exploring new materials, battery chemistries, and manufacturing techniques. Some emerging technologies include solid-state batteries, which have the potential to revolutionize the EV industry by offering higher energy density, faster charging, and improved safety. 

However, as the automotive industry continues to evolve, the role of various precious metals in electric vehicles is likely to remain constant.

Investment

As the EV market and other green technologies continue to grow, investing in the space is top of mind for many. Using a diversified approach, as always, is key to long-term success in the market. Investing in the companies themselves, but also the metals and materials driving the industry, casts the widest net. 

Investing in commodities, however, can be difficult and often involves dealing in futures, a market that surpasses many investors’ level of sophistication. An alternative would be investing in a diversified ETF, like the USCF Sustainable Battery Metals Strategy Fund ZSB.

A more targeted approach is also a viable option. The USCF Aluminum Strategy Fund ALUM, for instance, allows you to get more granular and invest in aluminum specifically – a metal currently being researched as the basis for next-generation battery technology.