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Who Is Involved In The Rising Demand For Lithium Batteries?

Concerns over air pollution have pushed lawmakers in some of the world’s biggest economies – such as the United States, Europe and China – to enact policies that favour electric vehicles.

This is where rechargable lithium batteries come into play – they are used in electric vehicles to store and provide electrical energy. The rise of electric vehicles and the batteries needed had been a big factor in the 11% annual increase in global consumption of the lithium metal from 2010 to 2015, according to research group CRU. From 2016 to 2020, the demand for lithium for electric vehicle-related purposes is also projected to expand at 23% per year.

In Singapore’s stock market, there is at least one company that is exposed to this growing demand for lithium batteries. The company in question is Singapore Technologies Engineering Ltd (SGX: S63). The Economic Development Board had noted that ST Engineering’s subsidiary, ST Kinetics, is partnering with a few other organisations to conduct research & development on battery systems for electric vehicle applications.

This does not mean that growth in lithium battery demand would necessarily result in a windfall for ST Engineering. Research work sometimes do not produce results. Furthermore, it’s unknown just how much resources ST Kinetics is devoting to this project. ST Engineering brought in S$6.3 billion in annual revenue in 2015, so it would require big projects to move the needle for the company.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Ong Kai Kiat doesn’t own shares in any companies mentioned.