Electric vehicles (EVs) are becoming more popular.
Nearly every automaker is debuting at least one new EV model this year.
These models range from affordable sedans to luxury SUVs to super trucks.
By appealing to every type of car owner, EV growth should exceed most forecasts.
But this growth also comes with concerns over the supply of key battery materials.
The ones that dominate the headlines are nickel and cobalt.
These materials are part of the positive electrode of a battery.
But what’s often overlooked are the materials that go into the negative electrode.
Graphite makes up 95% of the negative electrode. And it’s in short supply.
Addressing the graphite shortage is key to keeping EV growth on track.
Graphite Demand Will Soon Exceed Supply
There isn’t a better alternative for graphite in batteries.
This makes us reliant on it for the foreseeable future.
Graphite can either be natural or synthetic.
But synthetic graphite is both costly and harmful to the environment.
That means the bulk of graphite needs to come from mining.
Currently China is the largest producer of this type of graphite, with 60% of the global supply.
Economic tensions and supply chain issues mean we shouldn’t rely on China too much.
But even if we were able to get along with China and structure better supply chains, it wouldn’t be enough.
We’ve already started to rely more on synthetic graphite to meet demand.
And by 2023, the demand for graphite will start to outpace its supply.
The IMF expects an 85% gap between supply and demand by 2050.
China Isn’t the Only Place With Graphite Deposits
Most plans to address the shortage involve increasing production in China.
Even if those plans pan out, they don’t address the overreliance on China.
This is where companies like Northern Graphite Corp. (OTC: NGPHF) offer a potential solution.
It’s looking to bring graphite mining to North America.
It spent most of last year testing the quality of graphite in Canada.
It’s currently funding mining facilities in Ontario. And it has another graphite project in Quebec.
But graphite isn’t the only EV material in short supply that we rely on China for.
Ian King talks about another key EV material in his Strategic Fortunes service.
There’s a company that’s set to profit from the material by ending China’s dominance over it.
You can learn more about Strategic Fortunes by clicking here.
Regards,
Research Analyst, Strategic Fortunes
Morning Movers
From open till noon Eastern time.
Upstart Holdings Inc. (Nasdaq: UPST) operates a cloud-based artificial intelligence lending platform. The stock is up 36% this morning after the company announced a share buyback program following results for the fourth quarter with strong growth and record profits.
Generac Holdings Inc. (NYSE: GNRC) designs, manufactures and sells power generation equipment, energy storage systems and other power products. It is up 15% after the company reported results for the fourth quarter that beat estimates, and issued a strong sales outlook for 2022.
Vacasa Inc. (Nasdaq: VCSA) operates a vacation rental management platform in North America, Belize and Costa Rica. It is up 14% after analysts at JPMorgan Chase initiated coverage on the stock with an overweight rating, stating that it was poised to become one of the largest vacation rental platforms in the U.S.
Inspirato Inc. (Nasdaq: ISPO) a subscription-based luxury travel company. It is up 12% this morning on the continued excitement around the stock since it went public via a SPAC deal last week.
Cellebrite DI Ltd. (Nasdaq: CLBT) provides digital intelligence solutions for the public and private sectors worldwide. The stock rose 12% after the company beat fourth-quarter earnings estimates by a wide margin and reported record annual recurring revenues.
Alkermes plc (Nasdaq: ALKS) researches, develops and commercializes pharmaceutical products to address unmet medical needs in various therapeutic fields. The stock is up 12% after reporting a strong earnings beat for the fourth quarter.
MYT Netherlands Parent B.V. (NYSE: MYTE) operates a luxury e-commerce platform for fashion consumers under the name Mytheresa. It rose 11% after reporting on a great second quarter that was driven by a record number of first-time customers and increased spending from existing customers.
Gravity Co. Ltd. (Nasdaq: GRVY) develops, publishes and distributes online games. It is up 11%, staging a comeback after falling earlier this week when it reported less-than-appealing preliminary revenues for the fourth quarter.
Corsair Gaming Inc. (Nasdaq: CRSR) designs, markets and distributes gaming and streaming devices, components and systems. The stock is up 11% on the news that it is set to join the S&P SmallCap 600 Index by the end of the week.
Corcept Therapeutics Inc. (Nasdaq: CORT) discovers and develops drugs for the treatment of severe metabolic, oncologic and neuropsychiatric disorders. It is up 10% despite missing revenues for the fourth quarter because the company said it expects strong revenue growth in 2022 as pandemic conditions fade.