From today's (23/1) AFR:Prediction #2Right now, the EV market is...

From today's (23/1) AFR:
Prediction #2
Right now, the EV market is still very much in a multiyear uptrend.According to Benchmark Intelligence, there are more than 300 gigafactories under construction across Asia, Europe, and the US.What is a gigafactory you might ask? It’s a name designated to the giant manufacturing plants being built to mass produce electric vehicle (EV) batteries.Why is that important?The construction of these factories is tangible proof that the global economy is committed to rebuilding a global fleet of passenger cars using the Li-ion battery technology.No longer is this just some environmental ideology or far-flung idea set to take place in 10 or 20 years.It’s these industrial scale gigafactories, which gives manufacturers the capacity to bring EVs to the masses.The world’s largest car manufacturers from Tesla, Hyundai, Toyota, Ford, BMW, among others, have committed themselves to electric, far more rapidly than most anticipated.This has been the catalyst for a surge in lithium stocks in 2022.Yet the market has been asleep to other minerals needed in battery manufacturing.Cobalt, rare earths, nickel, copper will all perform well.However, there’s one mineral in particular that might repeat lithium’s 2022 performance (or even exceed it) thanks to strong demand and far greater supply constraints…battery grade graphite.Graphite is the premium product for EV battery anodes.Yet, it might surprise you that despite graphite falling in the shadows of lithium’s popularity last year, more graphite is needed in an EV battery (by weight) than any other mineral.It is astounding…Li-ion batteries need more graphite than lithium!Yet where will manufacturers source all this anode material?Unlike lithium, graphite producers have not been the beneficiary of enormous investor capital over recent years.While lithium explorers have unlocked vast new reserves, suitable graphite deposits remain scarce.Lithium production is set to ramp up in a big way over the next two years, thanks to new discoveries across Chile, Argentina, Canada, and Australia.But a crisis looms for vehicle manufacturers in sourcing similar quantities of graphite.What’s more, the world’s supply of this important mineral is almost exclusively restricted to China.Benchmark Intelligence states that China was the world’s largest graphite producer in 2021 with 820,000 metric tons (MT)…according to the US Geological Survey, the country accounted for 79% of world graphite mining in 2021.That is a dominating statistic and key reason global manufacturers should be worried about future graphite supply.Lack of supply, coupled with concentrated risk is made worse through China’s highly polluting techniques for purifying graphite product in the EV market.The Washington Post conducted an investigation highlighting the problem, you can read about that here.Widespread contamination of its river systems has been accepted by the world’s ‘green’ vehicle manufacturers.But this cannot last.Consumers will demand ethically sourced raw materials as part of the ‘green agenda’ in transitioning to renewable energies.This will place even greater pressure on this critical mineral, particularly when you consider that demand for battery grade graphite is set to see a seven-fold increase over the coming years…that’s according to Benchmark Intelligence.In my mind, the construction of three hundred gigafactories was the catalyst for 2022s exuberance for lithium stocks.But graphite continues to be overlooked… I think this will change in 2023… Let’s wait and see.