Start Investing in the Next Generation of Battery Technology Today

Close your eyes and try to count the number of batteries in your house right now...

What did you come up with? Roughly 40 or so?

That's about average.

Now consider that Americans purchase about 3 billion batteries each year to power everything from smoke detectors to watches to their kids' toys. That works out to 10 new batteries per year for every single person in the country.

Besides food products, what else do you purchase 10 times per year? Not much... and yet batteries aren't usually thought of as a good investment opportunity.

It makes sense if you think of batteries as the AA and AAA varieties that power most household items. But those aren't the kinds of batteries I'm talking about today...

I'm talking about the future of battery technology.

There's a very bright future ahead for this space – and the investors who get in early. So much innovation is taking place in this technology that will soon lead to more options, greater charging capacity, and in some cases, lower costs.

And in this report, I'm going to tell you all about it...

It's Only a Matter of Time...

The battery market is expected to grow from $27 billion in 2021 to $155 billion by 2028 – a nearly 6X increase in just seven years. And by the end of 2040, financial-services company Morgan Stanley estimates the battery industry will be worth $525 billion.

This trend won't be short-lived. The battery revolution is here, and it's just going to get bigger and bigger... and bigger.

The reason is simple: Batteries are key components in our world.

Yes, they can be the AA batteries in your TV remote. But they're also the next-generation technology that fuels everything from our smartphones and laptops to electric vehicles ("EVs") and energy-storage systems. They're what will push solar, wind, and hydroelectric power to the next level.

These batteries allow us to harness and store energy for use when the sun isn't shining or the wind isn't blowing – which oftentimes are peak energy-usage hours. That makes batteries with great energy density and the ability to hold large amounts of power so important.

The growth of EVs is a big driver of battery technology, too.

We all know what has been happening at the gas pump recently. Prices soared to never-before-seen levels last year – and they've remained high since. Anyone who drives a traditional gas-powered vehicle has felt these high prices in their wallet.

A lot of this is the result of the war between Russia and Ukraine. It has greatly disrupted the world's energy market. But it has also accelerated the shift to EVs...

Just two weeks after Russia invaded Ukraine on February 24, 2022, online car dealer Cars.com saw searches for EVs skyrocket 112%. Searches for "used EVs" climbed 130%.

EVs have rapidly grown in popularity, but they still only make up a small portion of U.S. auto sales – about 6% as of the third quarter of 2022. That leaves a ton of room for upside. And as that happens, more batteries and better battery technology will become a necessity.

To keep up with this demand, the U.S. Department of Energy published a list of battery plants expected to come online in the U.S. between 2022 and 2026. Eight are partnerships between auto manufacturers and battery companies.

In other words... battery production is about to flourish.

Now, not all megatrends are created equally. Some have a higher probability of coming to fruition than others. But the two trends fueling the next generation of battery technology – the continued adoption of EVs and the push toward clean energy – are a near certainty.

And considering both are highly dependent on newer and better battery technology, that makes this megatrend a near certainty as well.

Today, the lithium-ion battery powers most modern electronics. The battery dates back to 1960, but it didn't morph into its current form until 1980.

But after 40-plus years of little innovation, things are about to change in a very big way...

Several next-generation battery technologies are making their way through the pipeline. I can't say which will be the winner yet – it's far too early in the game. But I can say that I'm almost certain that a new battery technology will overtake lithium-ion batteries by the end of this decade.

That makes the market potential for the company (or companies) that discovers and commercializes the next generation of battery technology incredibly massive. In fact, it's so massive that it may end up being the biggest in history.

So, if you too believe in the future of EVs and clean energy, it should be a no-brainer to start building exposure to the technologies that will make it all happen.

The Next Generation of Batteries Is 'Solid'

A conventional battery has three components: an anode, a cathode, and an electrolyte. The electrolyte is often a liquid or gel.

Over the past few decades, these batteries have improved a great deal. The amount of energy they can store – called their "energy density" – has improved. And manufacturers have experimented with different materials to boost that output even further.

But there hasn't been a massive leap forward in battery technology for some time.

I'm not just talking about a 10% or 20% improvement in storage capacity. I'm talking about a complete change in the way we think about batteries.

The good news is that we're on the verge of a shift. And I expect it to happen by the end of this decade – what I call the "Roaring 2020s."

A lot of companies are trying to crack the code of the next-generation battery. Some have made significant progress. And one technology in particular appears to be the early leader...

It's called a solid-state battery.

It functions in a similar fashion to a conventional battery. But as its name suggests, it includes a solid electrolyte instead of one that's a liquid or gel.

This solid electrolyte is a compressed, high-energy-density version of the standard liquid electrolyte. This is important for several reasons...

By using a solid, the battery can be lighter and smaller – and therefore pack a much bigger punch. The energy density of a solid-state battery is expected to be at least 2.5 times that of the industry-standard lithium-ion battery (what's currently being used in EVs, smartphones, laptops, etc.).

That means that solid-state batteries can hold a lot more energy than standard batteries. And you can fit more of them in a smaller space. This could significantly boost the energy storage of electronics, EVs, renewable-energy systems, and many other technologies.

Because solid-state batteries don't have any freezable liquids, they can also be used in a wide range of temperatures. They're less likely to catch fire, too – which is a risk with lithium-ion batteries – making them better suited for more applications.

Here's another way to think about it...

Today, you have to recharge your smartphone every night... sometimes even more often! And if you own a typical EV, you can only drive 250 to 300 miles on a single charge. Then you have to patiently wait for that battery to recharge.

Solid-state batteries will completely change these common annoyances.

Imagine if you didn't have to plug in your smartphone for days... or if you could drive your EV as far as 1,000 miles before having to recharge. That would fundamentally change your behavior. And it would open the doors for many new technologies that we haven't even dreamt up yet.

This future may seem distant. But it's closer than you think.

Money is pouring into the research and development of these new batteries. But the technology isn't quite ready for these markets yet.

So for now, companies are focused on how to upgrade their battery technology today. And that brings us to some other lithium-ion alternatives...

The Materials Challenge

The lithium-ion batteries used to power today's EVs are made up of metals that include nickel, cobalt, aluminum, and iron. These metals are in high demand, and their prices have increased dramatically as a result.

This presents a problem for long-term visibility...

Cobalt specifically is a concern. It's the most expensive material in lithium-ion batteries – costing more than all the other metals combined. It's geographically limited, with most of its supply coming from the politically unstable Democratic Republic of the Congo ("DRC"). And straining the situation even further is the fact that China controls 70% of the DRC's cobalt-mining sector and more than 80% of cobalt refining.

That makes it even more expensive for automakers to include these batteries in their vehicles. And it makes them more susceptible to supply-chain disruption. So, automakers are starting to experiment with alternative materials...

Lithium iron phosphate ("LFP") batteries provide one possible solution.

These batteries replace the nickel and aluminum used in their lithium-ion counterparts with two cheaper materials – iron and phosphate. But this swap comes with a trade-off.

Taking these metals out of a battery makes it less dense, which means it can't go quite as far on a single charge. So when Tesla (TSLA) and Ford Motor (F) include LFP batteries in their EVs, they must have shorter mileage goals.

The Tesla vehicles that run on these batteries have a maximum range of about 270 miles – and they perform even worse in colder conditions. (This is where the cold-weather benefit of solid-state-battery technology really shines.)

Meanwhile, a startup called Enovix (ENVX) is playing with other materials to build off of the current technology. It's adding silicon to lithium-ion batteries and stacking battery cells to generate more power and increase an EV's range.

But lithium – whether in lithium-ion or LFP batteries – isn't the end-all, be-all when it comes to powering EVs...

Lithium's Biggest Competitor

Nickel-metal hydride ("NiMH") batteries are another popular alternative to the more traditional lithium-ion options. These are most common in hybrids – which don't plug in and instead use fuel to recharge the battery. But they're playing a part in plug-in EVs as well.

NiMH batteries are more advantageous because nickel makes batteries denser and allows them to hold more power. That means they possess longer battery life – and therefore boast a longer range.

This could provide a major boost to the mass adoption of EVs. One of the biggest complaints of EV naysayers is that they can't drive as far as they could in a traditional car. But that's about to change...

Tesla uses NiMH batteries to power some of its cars, and those can drive 350 miles on a single charge. That could nearly get you from Baltimore to Boston... or Los Angeles to Phoenix. Those same vehicles powered by LFP batteries could only get you 270 miles per charge – which means that NiMH batteries provide nearly 30% more range than their lithium counterparts.

NiMH batteries will play a major role in the growing EV market – which means that nickel demand will continue to surge. In fact, Brazilian mining company Vale (VALE) said that global nickel demand should increase 44% from 4.3 million tonnes in 2022 to 6.2 million tonnes by 2030.

And it's all thanks to EV batteries.

Some big-name companies are producing nickel batteries – including Panasonic (PCRFY), LG Chem, Samsung Electronics, and SK Innovation. These massive firms are partnering with some of the biggest automakers in the world to power EVs. And they're not just limited to producing NiMH batteries...

These companies are also producing lithium-ion batteries for EVs. This allows them to profit no matter what battery technology comes out as the winner.

Avoiding the Supply Problem

One of the biggest drawdowns for NiMH and lithium-ion batteries is cost. These metals are expensive. They're not widely available either. Most of the world's lithium supply is concentrated in just four countries – Australia, Argentina, Chile, and China.

As a result, I expect automakers to keep digging for alternative power options...

Sodium-ion batteries could be a strong contender. They simply swap the lithium for sodium. This has its advantages.

Sodium is much easier for automakers to get – allowing them to skirt the supply-chain issues that have recently held up production. This lets manufacturers churn out more batteries at a lower cost. And we're not just talking pennies here... We're talking about a drastic difference.

Investment bank Jeffries estimates that because of sodium's abundance, sodium-ion batteries could be 30% to 50% cheaper than the lowest-cost lithium-ion batteries on the market today. Those are major savings that are sure to draw interest from automakers.

And sodium-ion batteries hold up just as well. Chinese company Contemporary Amperex Technology ("CATL") – the world leader in global EV-battery usage – says that sodium-ion batteries match lithium-ion batteries in their life cycle and safety performance. But that's not all...

Sodium-ion batteries take less time to charge and perform well in colder temperatures. As we've talked about, a battery that holds up in the cold would certainly accelerate adoption across the U.S. – and around the globe.

These batteries currently take a backseat to their NiMH and lithium-ion counterparts because most don't have the density to hold power as well. But that doesn't mean they don't have a part to play in the growing EV trend.

Verified Market Research estimates that the global sodium-ion-battery market will increase from $900 million in 2020 to $2.5 billion by 2028 – a compound annual growth rate ("CAGR") of 11% in eight years.

CATL unveiled its first sodium-ion battery in 2021 and plans to mass produce them in 2023. And I expect other companies to follow suit.

The Battery Boom Is Coming

So there you have it, folks – a complete review of the next generation of the battery industry.

This trend is inevitable, yes. But it's still just the beginning. As a result, it's impossible to know which technology will come out as the winner... and which companies will be at the forefront of that growth.

But you can bet I'm doing the research.

The future of battery technology is a hypergrowth megatrend that I've followed for years – and it's only gaining more mainstream attention. It's only a matter of time before the masses catch on to what we already know...

This industry will generate massive wealth for investors who get in early.

And I have every intention of being part of that group.

In fact, my McCall Report subscribers have already started building exposure to this trend.

Click here to learn how to get access to The McCall Report and be the first to hear about these wealth-building opportunities... and far more.

Here's to the future,

Matt McCall
Editor, Daily Insight