One of the greatest fortunes in history was built by Henry Ford.
At its peak, his wealth surpassed $200 billion in today’s dollars.
To throw a little perspective on this, just keep in mind that it would take the combined net worths of BOTH Bill Gates and Mark Zuckerburg to barely top this feat.
It was all thanks to the Model T.
By 1925, Ford’s Model T accounted for 40% of all cars sold in the United States. In total, Ford’s plants rolled out over 15 million of the vehicles by the time they stopped production in 1927.
Yet there was more to this market than simply producing these cars.
When the first drive-in filling station was established in Pittsburgh a few years after the first Model T's started rolling off the assembly line, demand for more filling stations exploded as they spread like wildfire across the American landscape.
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Once this infrastructure was put in place, all bets were off and what took place in our transportation sector was nothing short of a revolution.
Between 1950 and 2019, gasoline demand took off running, climbing 513% to around 9.3 million barrels per day.
You know how this story ends, don’t you? Maybe not.
You see, another revolution has been quietly underway.
And even though most of us in the Energy and Capital investment community can see what’s coming next over the horizon, I believe it’s starting to happen much sooner than you might imagine.
Take a closer look around you and you’ll notice the subtle signs here and there.
Perhaps it’s the dedicated charging spots for EVs at your local grocery store, or perhaps one or two squirreled away in the corner of your nearest Wawa.
Then there are some not-so-subtle hints you’ll notice.
Driving through Takoma Park, Maryland, on my way back from a day trip to Washington, D.C., I passed a very peculiar gas station.
All of the pumps were bound and covered in a light-green tarp, indicating that the pumps were out of order.
Oddly enough, the pumps worked just fine.
It turns out that the RS Automotive I drove by that morning by was the first gas station in the United States to fully transition to electric charging.
[Learn More: Insiders Say it Will Enable Drivers to Go 1,000 Miles on a Single Charge]
What are the owners preparing for?
Look, we’ve long talked about catalysts within the EV revolution that would do for electric vehicles what the Model T did for the automobile.
Much of its success has hinged on the one company beloved by all the merry investors in Sherwood Forest: Tesla.
When Elon Musk’s Gigafactories started churning out Model 3s, it was easy to draw a few similarities to Henry Ford’s Model T.
Both were built to provide your average worker an affordable automobile; the Model 3 is half the cost of Tesla’s more expensive Model S.
The key for Musk has always been the ability to penetrate the Chinese EV market.
So far, he’s proven he can do it.
Despite the ongoing volatility due to COVID-19, Tesla sales have taken over the Chinese market, with Model 3 production in China topping 12,571 cars last month.
In July, the company sold more Model 3s in China than the next-three-largest all-electric vehicle brands — combined!
However, the EV boom is more than just Tesla.
Sales of “new energy vehicles” in China are up 20% year over year.
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Remember, we’re still in the early stages of this EV transition.
And make no mistake, there is one very real winner in all of this.
Last year, the global market for lithium-ion batteries was nearly $40 billion.
Within the next seven years, it’s projected to hit approximately $130 billion, with a CAGR of 18%.
Granted, this market is more than simply electric vehicles. You know as well as I do how much our everyday life relies on these lithium-ion batteries, especially if you’re reading this from the convenience of your phone.
If you’re not bullish on the future of batteries, you’ll want to rethink your position. Because unlike the investors who are pouring their life savings into Elon Musk’s pocket and praying the bubble doesn’t pop, the real money won’t be made by automakers like Tesla.
No, the massive pools of wealth that’ll be built on the back of the EV revolution will be from those critical battery metals.
And they have entire countries scrambling to secure their own domestic supplies on these resources, including the United States.
Until next time,
Keith Kohl
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