EVs (electric vehicles) have been around for quite some time. However, the concept gained popularity with Tesla (TSLA) vehicles. Most top automakers have EVs in their portfolio. In addition to its premium vehicles, Tesla offers its mass-market Model 3, which could be its key growth driver. Tesla has also unveiled its semi truck.
It has been more than a year since President Trump was elected (SPY) (SPX). His election fueled a sharp rally in risk assets. While equity markets rallied after the election, commodities also broke free from their narrow price channels. Metals from copper to aluminum rallied due to expectations of higher demand under Trump’s Administration. Analysts referred to the sharp rise in some assets as the “Trump effect” or “Trump trade.”
Metals seem to have moved from the “Trump effect” to the “Tesla effect.” On December 12, 2017, Glencore (GLEN-L) held its annual investor update. The expected disruption from vehicle electrification was among the key takeaways from the event. Other miners including Freeport-McMoRan (FCX) and BHP Billiton (BHP) also see electric vehicles as a key growth driver for some metals. In this series, we’ll look at the key takeaways from Glencore’s investor day. We’ll also see how the company is placed to capitalize on the electric vehicle story.