3 Stock Picks As The Electric Car Boom Accelerates

Electric vehicles (EVs) are a disruptive technology—all on their own. But the EV chain is a long one, and there are significant opportunities here in everything from batteries to artificial intelligence and semi-conductors.

Our energy future is evolving rapidly, and it’s packed with EVs, massive energy storage solutions and nanotechnology.

Consider this:

• An amazing 1.26 million EVs were sold in 2015, 2 million were sold in 2016, and sales for this year are up 86 percent in the third quarter.
• Tesla’s 35 GwH capacity gigafactory plans to ramp up to 150 GwH
• Northvolt is planning a similar plant in Sweden
• LG plans to open Europe’s largest EV battery factory in Poland next year
• General Motors (NYSE:GM) recently released plans to launch 20 EV models by 2023
• Renault is planning to double its EV offerings in the next five years
• Panasonic just announced the start of automotive lithium-ion battery production at a plant in Himeji, Japan from 2019 (adding to its existing five plans in Japan, which supply Tesla).
• Investments in new lithium ion battery capacity out to 2020 are in excess of $12 billion and rising according to Benchmark data.

For miners of lithium, cobalt, and graphite … for aluminum producers … for the giant automakers who let Tesla lead the way and are just now starting to play catch-up ... and for the artificial intelligence and semiconductor geniuses on this chain, the investment opportunities are amazing.

Major metals shortages are looming, technological advances are mind-blowing and things we thought impossible are now already entering the mainstream.

Here are 5 stocks for investors looking to latch on to the EV chain, which isn’t all about Tesla.

#1 Albemarle (NYSE:ALB)

This major producer of chemicals is the world’s largest supplier of lithium, and has been since early 2015 when it acquired Rockwood Holdings. Right now, ALB has about 35 percent of the global lithium market share with market cap of $15.16 billion.

Albemarle Corporation has risen 45.60 percent since October 11, 2016 and is trending upwards. It has outperformed the S&P500 by 28.90 percent. Right now, it’s trading at close to $140 per share and has seen its shares pop nearly 18 percent in the past three months.

And it’s definitely not smoke and mirrors. Real results have been a huge boost, with 31 percent year-on-year revenue growth in its segment for lithium and advanced-materials in Q1 2017.

The institutional sentiment increased to 1.25 in Q2 2017, compared to the 1.23 in Q1. The ratio has increased, as 244 active investment managers increased and opened new holdings, while 195 sold and reduced their equity positions in the company.

Analysts are waiting for the company to report earnings on November 6. They expect $1.07 EPS, up 17.58 percent or $0.16 from last year’s $0.91 per share.

Major catalysts include an up-coming doubling of lithium carbonate production capacity thanks to recent regulatory approval to expand at Greenbushes in Australia, which will begin in the Q2 2019. And there will be more growth before then, with capital expenditures of up to $400 million. Lithium is the key focus right now for Albemarle.

More good news for the company is that China is considering an eventual ban on production and sales of cars that run on diesel or gasoline, efforts to reduce carbon emissions and pollution and is also aimed at promoting the development of electric and hybrid vehicles. The news provided a boost to lithium stocks, including Albemarle.

#2 Global Li-Ion Graphite Corporation (CSE: LION; OTC: GBBGF)

This could be the first company to bring us graphite ‘made in America’.

The enormous volume of lithium-ion batteries required to the changeover from fossil fuel power to electric power requires more graphite than it does lithium or cobalt, and demand for graphite is set to increase 200 percent in less than three years. By 2025, we’ll be looking at a 300 percent increase in demand. The scary part is that the U.S.—the largest consumer of graphite—doesn’t mine any. But it may soon, and that’s exactly why we’

Drill hole locations are already planned, and geophysical surveys have already been completed. Optimism is running high because they’re now waiting on drilling permits, and Nevada is a mining-friendly state that’s been key to harness the energy revolution.

And it’s not just Tesla that LION is targeting as a potential customer. The bigger picture also includes voracious Chinese demand.

China’s crackdown on polluting industrial plants has taken 30 percent of its graphite electrode production capacity offline. That’s 300,000 tonnes of graphite capacity shuttered, leading to recent soaring prices for the metal. China has suddenly become an importer of graphite.

That means that graphite prices have been soaring. This year alone, shortages in China have driven prices to $16,330 per tonne. That’s a ninefold increase. On a global level, spot prices for graphite electrodes have jumped even more—hitting up to $35,000 per tonne as Chinese exports dried up.

In India, shares of graphite electrode manufacturers have doubled in the past three months thanks to a massive 300 percent jump in global electrode prices, and the momentum should remain steady driven by a sudden surge in electrode demand.

Global Li-Ion is also targeting the hungry Chinese and Indian markets, which it could access from its other graphite development in resource-rich Madagascar.

5 ALCOA (NYSE:AA)

Alcoa has become synonymous with aluminum. It’s got the largest bauxite mining portfolio in the world—and bauxite is the key element used to produce aluminum. It also has a large refining and smelting system.

What we’re looking at specifically here is the fact that aluminum is increasingly replacing steel to improve the fuel efficiency of vehicles and is important for EV manufacturers in effort to extend the range of their vehicles.

Between 2013 and 2016, replacing steel in vehicles led to additional demand of 1.6 million metric tons of aluminum.

Overall, this entire industry is looking great. Zacks Industry Rank puts the metal products-distribution pace at 28 out of some 250 industries.

Alcoa is expected to post adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $536 million in 3Q17—compared to $483 million in 2Q17 and $265 million in 3Q16. Year over year, Alcoa’s earnings have risen 53.80 percent. The stock appeared $49.30 above its 52-week highs and is up 2.49 percent for the last five trades.

Not only is Alcoa currently one of the top three in the industry, but it’s also seeing solid estimate revisions, suggesting it could be a very interesting choice for investors. Its shares have gained 69 percent this year.