Over recent years, there has been no bigger opportunity for investors than technology.
The FAANG stocks alone have gained over $1 trillion in market capitalization since 2014 – and these stocks, along with other tech movers and shakers, have helped propel indices to constant new highs.
While tech shows no signs of letting up on its dominance over markets, investors should know about two other multi-billion dollar sectors nipping at its heels. In today’s infographic, done in conjunction with SmallCapPower, we’ve highlighted the macro investment cases behind tech as well as these other high-growth areas: battery metals and cannabis.
For those interested, they’ve also published a watch list of nine stocks with double or triple-digit growth in these sectors.
The infographic highlights three of the top performing stocks in these sectors YTD. Don’t forget to see the full list of nine stocks.
Like technology, the battery metals and cannabis sectors have upside attached to secular trends that are changing our world.
Technology: “Software is eating the world”
Battery Metals: The green energy revolution
Cannabis: Legalization and decriminalization of cannabis products
As a result, all of these sectors are poised to continue expanding at rapid rates:
|Market size (2016)||$880B||$57.0B||$6.7B|
|Market size (2021e)||$1.03T||$82.9B||$20.4B|
It’s worth mentioning that above projections are based on the overall IT sector, the rechargeable batteries market, and the legal cannabis market.
Further, it’s also important to recognize that individual subsectors within tech are growing much faster than the overall market as a whole, such as the blockchain, IoT, cybersecurity, SaaS, AI, and VR/AR.
Sustainable Growth Drivers?
While there’s no shortage of hype around tech, battery metals, or cannabis, it is also clear that all of these markets will only grow in importance over time.
In technology, for example, the slower-moving verticals like healthcare, government, finance, and education are only starting to get disrupted. The blockchain is in its early days and will touch many aspects of life, and AI alone is expected to have a $15.7 trillion impact by 2030.
Meanwhile, the green revolution is driving the future importance of battery metals like lithium, cobalt, nickel, and graphite. As EV penetration grows, so does lithium-ion battery use – and these metals are all needed to make them work.
Finally, the trajectory of legalized cannabis seems difficult to stop. In multiple states, cannabis is already available for recreational use – and in recently-legalized places like Canada and California, the recreational shops will open up very soon. However, the cannabis industry is still in its infancy, and many millions of people are still expected to gain access yet. This, like the other two industries, creates a fast-growing opportunity for both business and investors.
Visualizing Copper’s Role in the Transition to Clean Energy
A clean energy transition is underway as wind, solar, and batteries take center stage. Here’s how copper plays the critical role in these technologies.
A future powered by renewables is not in the distant horizon, but rather in its early hours.
This new dawn comes from a global awareness of the environmental impacts of the current energy mix, which relies heavily on fossil fuels and their associated greenhouse gas emissions.
Technologies such as wind, solar, and batteries offer renewable and clean alternatives and are leading the way for the transition to clean energy. However, as with every energy transition, there are not only new technologies, but also new material demands.
Copper: A Key Piece of the Puzzle
This energy transition will be mineral intensive and it will require metals such as nickel, lithium, and cobalt. However, one metal stands out as being particularly important, and that is copper.
Today’s infographic comes to us from the Copper Development Association and outlines the special role of copper in renewable power generation, energy storage, and electric vehicles.
The red metal has four key properties that make it ideal for the clean energy transition.
It is these properties that make copper the critical material for wind and solar technology, energy storage, and electric vehicles.
It’s also why, according to ThinkCopper, the generation of electricity from solar and wind uses four to six times more copper than fossil fuel sources.
Copper in Wind
A three-megawatt wind turbine can contain up to 4.7 tons of copper with 53% of that demand coming from the cable and wiring, 24% from the turbine/power generation components, 4% from transformers, and 19% from turbine transformers.
The use of copper significantly increases when going offshore. That’s because onshore wind farms use approximately 7,766 lbs of copper per MW, while an offshore wind installation uses 21,068 lbs of copper per MW.
It is the cabling of the offshore wind farms to connect them to each other and to deliver the power that accounts for the bulk of the copper usage.
Copper in Solar
Solar power systems can contain approximately 5.5 tons of copper per MW. Copper is in the heat exchangers of solar thermal units as well as in the wiring and cabling that transmits the electricity in photovoltaic solar cells.
Navigant Research projects that 262 GW of new solar installations between 2018 and 2027 in North America will require 1.9 billion lbs of copper.
Copper in Energy Storage
There are many ways to store energy, but every method uses copper. For example, a lithium ion battery contains 440 lbs of copper per MW and a flow battery 540 lbs of copper per MW.
Copper wiring and cabling connects renewable power generation with energy storage, while the copper in the switches of transformers help to deliver power at the right voltage.
Across the United States, a total of 5,752 MW of energy capacity has been announced and commissioned.
Copper in Electric Vehicles
Copper is at the heart of the electric vehicle (EV). This is because EVs rely on copper for the motor coil that drives the engine.
The more electric the car, the more copper it needs; a car powered by an internal combustion engine contains roughly 48 lbs, a hybrid needs 88 lbs, and a battery electric vehicle uses 184 lbs.
Additionally, the cabling for charging stations of electric vehicles will be another source of copper demand.
The Copper Future
Advances in technologies create new material demands.
Therefore, it shouldn’t be surprising that the transition to renewables is going to create demand for many minerals – and copper is going to be a critical mineral for the new era of energy.
How Much Oil is in an Electric Vehicle?
It is counterintuitive, but electric vehicles are not possible without oil – these petrochemicals bring down the weight of cars to make EVs possible.
How Much Oil is in an Electric Vehicle?
When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But there is actually much more to oil’s role, than meets the eye…
Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.
Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical material in making the EV revolution possible.
It turns out the many everyday materials we rely on from synthetic rubber to plastics to lubricants all come from petrochemicals.
The use of various polymers and plastics has several advantages for manufacturers and consumers:
- Easy to Shape
- Flame Retardant
Today, plastics can make up to 50% of a vehicle’s volume but only 10% of its weight. These plastics can be as strong as steel, but light enough to save on fuel and still maintain structural integrity.
This was not always the case, as oil’s use has evolved and grown over time.
Not Your Granddaddy’s Caddy
Plastics were not always a critical material in auto manufacturing industry, but over time plastics such as polypropylene and polyurethane became indispensable in the production of cars.
Rolls Royce was one of the first car manufacturers to boast about the use of plastics in its car interior. Over time, plastics have evolved into a critical material for reducing the overall weight of vehicles, allowing for more power and conveniences.
Rolls Royce uses phenol formaldehyde resin in its car interiors
Henry Ford experiments with an “all-plastic” car
About 20 lbs. of plastics is used in the average car
Manufacturers begin using plastic for interior decorations
Headlights, bumpers, fenders and tailgates become plastic
Engineered polymers first appear in semi-structural parts of the vehicle
The average car uses over 1000 plastic parts
Electric Dreams: Petrochemicals for EV Innovation
Plastics and other materials made using petrochemicals make vehicles more efficient by reducing a vehicle’s weight, and this comes at a very reasonable cost.
For every 10% in weight reduction, the fuel economy of a car improves roughly 5% to 7%. EV’s need to achieve weight reductions because the battery packs that power them can weigh over 1000 lbs, requiring more power.
Today, plastics and polymers are used for hundreds of individual parts in an electric vehicle.
Oil and the EV Future
Oil is most known as a source of fuel, but petrochemicals also have many other useful physical properties.
In fact, petrochemicals will play a critical role in the mass adoption of electric vehicles by reducing their weight and improving their ranges and efficiency. In According to IHS Chemical, the average car will use 775 lbs of plastic by 2020.
Although it seems counterintuitive, petrochemicals derived from oil and natural gas make the major advancements by today’s EVs possible – and the continued use of petrochemicals will mean that both EVS and traditional vehicles will become even lighter, faster, and more efficient.
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