Forget Tesla Stock. The EV ‘Gold Rush’ Is in Copper.

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Copper is the way to play the EV boom, according to a David Einhorn.

Kena Betancur / AFP via Getty Images

There is a lot of money to be made in electric vehicles—just not in the stocks of EV makers such as


according to Greenlight Capital hedge-fund manager David Einhorn.

Einhorn presented at the Sohn Investment Conference Wednesday. His preferred way to play the EV boom is through copper. In a tweet sent out by the conference organizers, Einhorn explained: “Buy copper. EVs have [four times] the copper content of [gas-powered] vehicles. Chargers, solar panels, and wind power all require lots of copper, and Goldman predicts 5 [million] tons of demand growth by 2029.”

The world uses roughly 25 million metric tons of copper a year. The increase, depending on whether Einhorn was taking about metric or short tons, is about 16% to 20% of total demand. That works out to roughly 2% average annual demand growth a year.

That would be in addition to growth in regular demand for copper, which ends up in everything from cars to commercial buildings to computers to homes. It’s the world’s main conductor of electricity. Copper demand has grown at roughly 4% a year on average for the past 10 years.

Faster-than-historical growth can mean elevated commodity prices. It can also mean elevated profits for copper producers compared with their own history ,too.

Einhorn’s preferred EV investment vehicle is

Teck Resources

(ticker: TECK), which mines copper and other metals. The stock trades for about 11 times estimated 2021 earnings and is up about 32% year to date, better than comparable gains of the

S&P 500


Dow Jones Industrial Average.

Rising copper prices are part of that stock’s outperformance. Copper has climbed about 33% year to date, putting prices at levels not seen in the past decade.

Einhorn might be best known for his bearish call on Lehman Brothers before the 2008-09 financial crisis. His current take is an interesting one, but not because of his views on EV makers’ stocks. He is more of a traditional value investor and has struggled with EV valuations in the past. Bearish bets on Tesla (TSLA) stock have hurt Greenlight’s performance in the recent past.

Teck stock is up 0.7% in recent trading Thursday, while Tesla shares were flat. Tesla stock has slumped about 16% year to date, after rising more than 740% in 2020.

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