Beyond the Battery

The electric vehicle (EV) transition is often framed as a technology story because electric drivetrains are inherently more efficient. They convert most input electricity into motion, while combustion engines lose much of their fuel energy as waste heat. That efficiency edge, in theory, makes electrification a breakthrough for light transportation and supports a potential multi-decade shift in mobility.

Scaling this EV shift isn’t only about innovation, government policy or consumer preferences. Although these factors influence adoption rates, we think it’s primarily rooted in building the necessary physical systems at scale—powered by energy, constrained by materials, and enabled or delayed by infrastructure.

First, energy still matters because EVs don’t eliminate energy demand—they redirect it toward electricity and grid flexibility. Meanwhile, oil and gas remain essential in hard-to-electrify transportation segments such as heavy freight, aviation and marine, and they underpin the industrial activity, such as mining, refining, chemicals and manufacturing, required to build the transition itself.

Second, materials set the pace. EVs and grids are metals- and chemicals-intensive, and supply chains expand slowly. The binding constraints are often upstream—mining, refining, processing and manufacturing capacity—built over decades, not quarters. That’s why “picks and shovels” can matter as much as the end-product brands.

Third, infrastructure is the bottleneck. Electrification scales not only through generation but through the grid—transmission, substations, transformers, distribution upgrades, interconnections and charging. The hardest challenges are local and practical: urban constraints, permitting, labor and reliability, plus grid hardware and control systems to keep power stable as load electrifies.

While rising oil prices may reinvigorate short-term consumer interest in EVs, we believe this revolution is fundamentally a real assets buildout story. In our view, greater EV adoption will require significant capital formation in infrastructure, advantaged materials and processing, and grid equipment to increase capacity and ensure reliability. In our view, companies who are essential enablers of this buildout with scarce, advantaged assets are well-positioned to participate in this multi-decade investment cycle.