 Good day, fellow investors. We constantly hear news about Tesla, about how they are going to disrupt the automotive industry and produce 500,000 cars per year. Now, current electric vehicle sales are 1% of the total and expected to significantly grow in the future. If that happens, which probably it will happen, I don't know if Tesla will be the winner in that environment, but that doesn't matter. If electric vehicles are sold more and more, there will be more need for batteries. And everybody is focused on lithium and cobalt, because they call them lithium-ion batteries. However, lithium is not the main metal used in those batteries. We can see here that Tesla Model S uses 453 kilos of metals in a battery pack, of which only 63 kilos is lithium, the rest are other metals. And 80% of the other metals is nickel, and then 50% of the other metals is cobalt. Apple iPhone uses mostly cobalt, Nissan Leaf, Manganese, Tesla Powerwall, nickel cobalt and manganese. So cobalt, nickel, manganese are the metals where we will see the future in electric vehicle. I don't know which one will use what chemistry combination, but it's interesting to see how the metals fare now, what are the prices, what's their demand and supply in order to find the best low-risk, high-reward investment opportunity into the upcoming electrical vehicle trend. Even Elon Musk says that Tesla's batteries shouldn't be called lithium-ion batteries, but nickel-graphic batteries. If we take a look at cobalt prices, they have been pretty stable for a few years, nobody was so excited about cobalt, and then since the end of 2016 they exploded. If we check on the other hand, nickel prices, they have been falling for the last five years, and now are still in a downward cycle, so really low-low nickel prices. But if electrical vehicles really catch up and there will be higher demand for nickel, then we can expect higher nickel prices, and who will benefit the most, nickel miners. Let's dig deeper into the nickel environment and in the next video I'll analyze a nickel miner. So why hasn't nickel exploded? If you look at this graphic, you can see that cobalt and lithium and graphite are critical for battery touch, because demand coming from battery producers will be the largest part of demand for those metals. On the other hand, nickel is not that critical on the demand supply side, because 66% of nickel is used to make stainless steel. Thus, there is nickel, there is enough for now, and it really didn't get the attention of electrical vehicle analysts. Another reason why nickel prices are that low is because London Metal Exchange warehouse stocks levels are extremely high. You can see this chart, and they are above 400,000 tons. Nevertheless, global supply of nickel is around 2 million tons and demand is also around 2 million tons, but nickel supply growth is slower than nickel demand growth, which will lead to supply deficits, and that will push nickel prices higher when London Metal Exchange warehouses get depleted. That can take a while, but it's important to see what's going on before it happens if you want to invest. Now what's going on in the nickel environment? In 2001, there were many projects, nickel prices went much higher, went much higher in 2007 especially, but since then they have been falling, and there are not enough nickel projects to cover for the expected growth in demand. Growth in demand comes, of course, from China. We have seen a pickup in economic activities, so we can expect more demand for steel, more demand for nickel. Especially, I always look at the long term when India starts building its infrastructure, even more demand for nickel. So, a very positive long term outlook. On the electric vehicle story, Glencore and other analysts expect nickel demand to grow by 20% in the next 10 years, thanks to electric vehicles. 20% on a 2 million ton market is 400 million tons, which is very significant and can really move the needle for nickel. And to be more precise, deficits are already here. 2017 market balance for nickel will see a deficit of 100,000 tons. Of course, this is just one quarter of the inventory in warehouses, but if the same market supply-demand balance is remade, we will see a larger deficit and definitely a higher price of nickel. So now we have looked at supply-demand, we have to look at the cost. Because when you look at the cost-producing cost for a metal, then you can see what's the downside and if it's limited, even better. You can invest in a metal with the margin of safe. 2016 cash costs for nickel producers have been around $9,600 per ton, which is close to the current price. That means that it's not that profitable for many producers to produce nickel at this price level. So there is a limited downside. Nevertheless, there is one problem with nickel. Only 8% of global producers are price sensitive. Means that 92% of producers are producing nickel as a by-product. So they will produce it because they produce mostly copper alongside it. Everything that they get from those sales is a bonus. Nevertheless, it's important to know that there is a margin of safety. So nickel doesn't look that interesting now. There is no catalyst that will make it spike immediately. But if we take a look at the cobalt chart, we can see that there was a similar situation. So you can see here from 2014 to 2016 nobody was interested in cobalt. Declining price really not hitting the news. And then suddenly, beginning 2017, a big spike of more than 100%. Similarly, a similar thing can happen to nickel as the market recognizes. What's going on? So when the market recognizes that nickel is essential to make batteries, I think such a cobalt scenario might happen. Now, the problem is I don't know when will that happen. I'm pretty sure there is a margin of safety on the cost level and the upside is very, very large. So in order to play the nickel potential future trend, you need to find a miner that's already profitable at current prices. So you can wait with a nice dividend, hopefully. You can find the miner that has thus lower costs than the average cost and lower than the nickel price costs. So that's also good. On top of it, if the miner doesn't have lots of debt, if it's a stable miner, you can invest, wait, and if the spike happens, you reap great benefits. If not, you have a satisfying return. So that's my story about nickel. I see it as a very interesting investment. I will dig deeper so you can expect more updates on what's going on. And you can expect soon a video about Noril's nickel, which is the top nickel producer, top two producer of nickel in order to see if it is a low-risk high-reward potential nickel investment exposure for your portfolio. Thank you for watching. Leave your comments below any thoughts about what's going on and the insights that can add value to the story are always appreciated. Don't forget to subscribe to be notified when the next nickel video comes up. Click like if you like the content and I'll see you in the next video.