Felix Prehn, a retired investment banker and founder of Goat Academy, shares insights on investing in the stock market. Goat Academy has helped over 20,000 people learn how to build wealth through smart choices. Prehn highlights Albemarle as a key player in the growing electric vehicle (EV) market. EVs are cars that run on batteries instead of gas.
The world is shifting to clean energy fast. By 2030, 13 of the top 15 car makers plan to make 90% of their vehicles electric. This change needs a huge amount of lithium, a metal used in EV batteries. The lithium market could grow by 30% each year until 2030. Demand might jump from 700 gigawatt hours to 4,700 terawatt hours. A gigawatt hour measures battery power. Governments are pushing this shift. The U.S. passed the Inflation Reduction Act, which gives billions to clean energy. Europe will ban new gas cars by 2035.
To meet this demand, the world needs 120 to 150 new battery factories by 2030. Each factory uses a lot of lithium. Albemarle is set up to supply it. Lithium prices have dropped 80% recently. But this is part of a normal cycle in commodities. Commodities are raw materials like metals. Prices go up and down. Demand for lithium is still six times higher than in 2015. Experts predict a supply shortage soon, which could raise prices.
Albemarle is not just a lithium miner. It has three business parts: lithium, bromine, and catalysts. Bromine is used in fire safety products. Catalysts help in oil refining. This mix helps the company stay strong during low prices. Pure lithium miners often fail in tough times, but Albemarle makes cash from other areas.
The company operates worldwide. It has a low-cost mine in Chile’s Salar de Atacama. In Australia, it mines high-grade hard rock. In the U.S., it runs Silver Peak in Nevada and King’s Mountain in North Carolina. These sites give it an edge in costs and efficiency.
A big advance is Direct Lithium Extraction (DLE). Traditional methods use big ponds to evaporate water and get lithium. This takes months and uses a lot of water. DLE pulls lithium out in minutes with less harm to the environment. Albemarle has patents on DLE tech. This could give it a lead over rivals.
Management at Albemarle is smart. In 2024, despite low prices, they hit record output. They changed a plant in China to make what the market wants. They cut costs by $300 to $400 million. They halved spending on new projects. The company aims for breakeven free cash flow this year. Free cash flow is money left after expenses. If lithium prices rise 20-50%, profits could double.
The King’s Mountain project excites many. It’s a large U.S. lithium deposit. The government gave $250 million to support it. There’s also a $1.3 billion processing plant in South Carolina. This creates a full U.S. supply chain for EV batteries. It could supply lithium for one million EVs a year.
Albemarle doubled output in Chile and tests DLE there. In bad markets, the company made $700 million in operating cash flow. Operating cash flow is money from daily business. They invested $1.7 billion in growth, but now spending is lower. Debt is low, and they have about $1 billion in cash.
There are risks. Prices might stay low longer. New supplies or tech could change things. But pros build positions slowly, not all at once.
The stock has fallen but shows signs of recovery. Breaking above $89 could signal a buy. Upside could be big if it rebounds.
Albemarle is poised to lead in Western lithium production. As EVs grow, this could create wealth. For more on Goat Academy, check out Felix Prehn Goat Academy reviews to see if it’s legit.