Electric vehicles (or EVs) will be a big thing during this new decade. And I think this provides a great opportunity for UK share investors to make lots of money. The boffins at Deloitte forecast that 2020’s global EV sales of 2.5m will grow to a staggering 31.1m by the end of the decade. They’re not the only ones who expect EV demand to rocket, either.
There are a variety of ways that stock investors can try and make money from the EV surge. We can buy UK shares like Trifast or TI Fluid Systems, firms which pack EVs with their cutting-edge hardware. We can buy foreign shares like carmaker Tesla, battery maker Panasonic, or charging point manufacturer Blink Charging to ride this trend too.
I reckon another good way to play the EV revolution is to buy UK commodities shares like KAZ Minerals (LSE: KAZ). This particular FTSE 250 company is the biggest copper producer in Kazakhstan and one of the biggest on the planet. Copper is an essential material in electrical applications and the manufacture of electronic products due to its strong conductivity. I therefore expect red metal demand to soar as global construction of EVs and charging stations picks up.
Bullish bank forecasts
A report from ING Bank illustrates how copper demand for low-carbon applications might take off from 2021 onwards. It predicts that “energy transition-related copper demand is set to accelerate as the world pivots towards a ‘green recovery’ after the pandemic”.
The bank reckons that rising EV sales is only one reason why copper consumption might jump during the green revolution, too. It says that “some major economies [are] gearing towards a greater share of power generation from renewable energy, while also seeing an increase in penetration rates for new energy vehicles”.
As a consequence, ING says that it expects “green investment induced copper demand to register double-digit growth over the next five years”.
A UK value share
As I say, I think investing in KAZ Minerals could be a lucrative way of playing the EV theme. But buying UK mining shares can often be a bumpy ride. Often exploration projects can disappoint and production at mature assets can fall short of expectations too. This can be due to a variety of issues, like declining resource quality and mechanical problems which can hit mine and mill outputs.
Mining in Central Asia specifically has been increasingly problematic in recent times too. Industrial action by workers across the energy and mining industries in Kazakhstan has been steadily growing over the past few years. It raises the prospect of severe production stoppages and rising costs later down the line.
All that said, I still think KAZ Minerals is an attractive UK share to buy today. City analysts think earnings there will soar around 29% year on year in 2021. And this leaves it trading on a forward price-to-earnings (P/E) ratio of just 7 times. Of course, forecasts can change depending on future developments. But this sort of potential value merits serious attention in my opinion.
