Profit from this Big Lithium Deal

How much does it take to kick-start domestic electric vehicle production in the United States?

According to recent action by the Biden administration, at least $2.5 billion. 

That’s the size of the loan the administration extended to General Motors (NYSE: GM) and LG Energy Solutions. With that money, the companies plan to start up lithium battery manufacturing hubs in Ohio, Tennessee, and Michigan. This will all be done through a company called Ultium Cells LLC, which is a joint venture between the two firms. 

GM, the company behind car brands like Chevrolet, Buick, and Cadillac, plans to phase out its lineup of gas- and diesel-powered cars by 2035 and go all-electric. 

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This is part of a larger trend we’ve talked about before, with businesses and governments largely aligning on setting goals for getting more EVs on the road. 

The Biden admin, for instance, wants EVs to make up half of new vehicle sales in the US by 2030. Some states are being more aggressive in their approach, like California, which wants to ban new gas-powered cars by 2035. 

Major shifts like these have forced car companies to change their offerings and partner up with companies that can help them make the switch. That’s why you’re seeing more headlines about car companies forming business partnerships to make the batteries they need to power these vehicles. 

When you throw in the fact that the administration is also offering tax incentives to companies that produce domestically, it makes sense for the car companies to shift focus. 

And with EVs gaining popularity with consumers, the trend is only going to accelerate. 

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In the first three months of 2022, EV registrations went up 60% in a market that was down 18%. That brought the overall market share in the country to just shy of 5%. The first nine months of the year saw over 530,000 new EVs registered, which is a 57% increase over the prior-year period. 

Gas prices pushed many people to make the change and will continue to do so. Over time, all other consumers will have no choice but to come aboard as they replace their cars. So it’s just a matter of when, not if, electric cars will become the norm. 

And it’s not the only shift this trend is going to bring about. 

To get all of these cars moving, we’re going to need more lithium. A lot more. 

As it stands, there is only one existing lithium producer in the US. That producer only has about 3.6% of the world’s lithium supply. We, and much of the rest of the world, get most of what we use from China. To secure the supply chain, US leadership wants to get away from reliance on China and get lithium from US soil or mines operated by friendly countries. 

It’s why you’re going to see a flood of financial backing for domestic lithium miners over the next few years. It’s something of a modern-day gold rush. There’s a massive demand to be filled, available supply can’t fully keep up right now, and the few who can provide supply are going to see massive benefits from it.

It’s why mining companies are scrambling to establish new mines just like car manufacturers are working to secure enough lithium to make their batteries. 

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Some will succeed, but many will not. 

Because it’s not just about finding the deposits, it’s about getting the permits and having the funding to get the drills turning. 

One company already has those things. 

It’s a small, little-known company that is fielding big offers from major firms. 

As lithium becomes more of a must-have, this company will become a household name in the sector. 

Take a look at our new research into the company and see why now is the time to buy, before everyone else does.

Ryan Stancil

Ryan Stancil
Editor, Daily Profit Cycle