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Recently we wrote about the accelerating adoption of autonomous driving technologies, and the effect that autonomous vehicles could have on electric vehicle adoption. With Alphabet (GOOG) launching its first public trials of autonomous vehicles in Phoenix, a radically different transportation future is coming into view: one in which many consumers will think of transportation as a utility rather than in terms of buying and maintaining a car. Push a button on your phone, and a robot car will appear to take you to your destination. That future is not 10 or 20 years away; more likely it is three to five years away. The disruption that will flow through the global economy as a result could potentially rival the disruption wrought in previous economic eras by railroads and electrification.

Two news items this week caught our attention and we thought we should tell you about them.

First, GOOG and ride-share service Lyft announced a partnership. While GOOG has the strongest autonomous vehicle technology, it will now be able to leverage Lyft’s database and commercial ride-share experience as it rolls out commercially available autonomous vehicles. (Lyft and its rival Uber are not fundamentally interested in providing part-time jobs to the gig economy; they are interested in gathering the data that will allow them to play a pivotal role in the arrival of on-demand autonomous vehicles.) Lyft is also partnering with GOOG during a dogfight over self-driving technology which GOOG alleges was stolen by a former employee and transferred to Uber.

Second, the CEO of giant commodity firm Glencore (London:GLEN), Ivan Glasenberg, was speaking at a mining conference in Barcelona, and in his slide presentation he noted:

“The electric vehicle [EV] revolution is happening and its impact is likely to be felt faster than expected. Virtually all automotive players [are] now accelerating their investment in/adoption of EV technologies… Supply chains are evolving rapidly with battery producers becoming critical players… The [EV] transition will require a significant change in material flows of the global economy including the installation/rebuild/replacement of supporting EV infrastructure… China is emerging as the global leader in [EVs].”

This transition, as we have noted, will likely be accelerated as autonomous electric vehicles reduce the payback period needed to recoup the expense of batteries. Mr Glasenberg noted that this transition will have a dramatic effect on demand for metals, with an average electric vehicle requiring an additional 160 kilograms of copper, 11 kilograms of cobalt, and 11 kilograms of nickel. Obviously, lithium demand will also increase.

Investment implications: Investors can approach the theme of electric and autonomous vehicles through several avenues. Artificial intelligence is a key component of the disruption, and investors should look at key AI companies. They should also consider the semiconductor manufacturers producing the most advanced AI chips on which the innovators’ software can run. Some major auto manufacturers may participate significantly, but the outlook for their revenues is cloudy, since part of the revolution will mean a far greater utilization rate for light vehicles, which would reduce vehicle sales growth. Still, they shouldn’t be counted out. Raw materials providers will also benefit from the transition — particularly those with exposure to critical minerals such as lithium and cobalt.

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