Lithium Demand Surges as EV Era Nears, Fund Grows 143% in Five Years
The era of the combustion engine is nearing its end, with major automakers and states setting clear targets for the phase-out of gasoline and diesel vehicles. This shift is driving demand for raw materials crucial to the energy transition, particularly lithium, which is the focus of the Structured Solutions SICAV - Next Generation Resources Fd A fund. However, the fund's shareholding in Varta AG remains undisclosed.
The fund has seen impressive returns, growing by 143 percent over five years. It invests in key lithium producers such as Orocobre, Livent Corporation, Albemarle Corporation, and Varta AG. The demand for lithium-ion batteries is projected to skyrocket, from 200 GWh in 2020 to over 2,000 GWh by 2030, due to the increasing trend towards electromobility. However, lithium extraction is complex and energy-intensive, raising questions about the industry's ability to quickly expand capacities.
Investors should note that the fund is considered volatile and should be seen as an addition to a diversified portfolio. The fund's greatest risk lies in the potential development of a mass-market battery technology that does not rely on lithium, which could significantly impact its investments.
As the world transitions towards electric vehicles, the demand for lithium is set to rise significantly. The Structured Solutions SICAV - Next Generation Resources Fd A fund, with its focus on lithium producers, is well-positioned to benefit from this trend. Despite its impressive track record and promising outlook, investors should be aware of the fund's volatility and the potential risks associated with lithium's role in future battery technologies.
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