The more lithium-ion batteries become a big part of our everyday lives, the more questions about their availability will arise. Depending on what you read or hear from the news, there’s either an abundance of the components making up lithium-ion batteries, or we are headed to a massive shortage due to the supply not being able to meet the demand. Both of these points are generalized in different ways and can sometimes impact the stock market one way or another. With the future of lithium-ion looking solid, it makes for an attractive portfolio investment option for many investors. One thing to keep in mind is how lithium-ion batteries’ components impact the general availability of them.
Misconceptions About Lithium Availability
When developing investment strategies around lithium and the components of lithium-ion batteries, investors have to separate the truths from the misconceptions. A common misconception people have is thinking the world is headed toward a shortage of the components due to the heavy reliance on rare earth elements. However, the term “rare” doesn’t necessarily mean the elements are rare and hard to find. The opposite is actually true, and rare earth elements are generally available worldwide. Increasing your understanding of rare earth elements can help you understand why they are named that way and how abundant they are.
Rare Earth Elements Aren’t Actually Rare
“Rare earth” is simply a classification rather than referring to an underabundance of elements. Many of the everyday products we use today, like cell phones, computers, and other electronics, rely heavily on rare earth elements. While there is no immediate concern about the abundance of rare earth elements, battery developers are continually looking for innovative ways to manufacture batteries more efficiently, which should make investors feel confident in their investment strategies surrounding rare earth elements.
Accessibility Is More Concerning Than Availability
The average person may think the availability of the components of lithium-ion batteries is the greatest concern, but it’s the accessibility that concerns most experts. China is the leader in the production of rare earth elements, so there’s always a concern about what will happen if they tighten their export restrictions. With consumers relying heavily on these components, developers are constantly looking for ways to have full access to them so the supply chain does not get disrupted. Accessibility in the future is also a concern, as the demand for the components of lithium-ion batteries is expected to increase significantly over the next decade with the emergence of electric vehicles, eco-friendly products, and more. While there’s no immediate reason to panic, accessibility to rare earth elements in the future is something to think about.
Making a portfolio investment in lithium-ion batteries or the components that make them up could be a great decision. At Stock Investing Info, we keep a close watch on these developments to help our clients make the best investment decisions for their portfolio. The stock market volatility isn’t always the best indicator to look at since it is influenced heavily by the media and other sources. We are here to answer any questions you have and clear up any misconceptions about lithium-ion batteries, so contact us at any time to speak with one of our professionals.