© Bloomberg

In 1786, scientist Luigi Galvani discovered electricity makes a dead frog kick its legs. Electric vehicles are inducing similar convulsions in an automotive industry that, if not dying, appears doomed in its current form. The latest shock to the system comes from the UK’s announcement that all new cars must be electric or hybrid from 2040. Such prohibitions create opportunities and perils for both the planet and business.

The switch will be powered by vehicle batteries, promoted from mere backups to primary power sources. The strain on resources may be huge. Cumulative consumption of lithium, a key battery material, would total 50m tonnes by 2050 according to a maximal projection from the World Bank. Reserves are estimated at just 14m. Demand for cobalt, another ingredient, could jump a thousand fold.

Fears of “peak” lithium or cobalt will probably prove as overblown as the peak oil theory that imagined the black stuff running out sooner rather than later. Higher prices inspire reserve discoveries and slicker extraction.

Investment in battery technology should temper soaring commodities demand too. UBS reckons each new generation of battery is 20 per cent more energy-dense. Cobalt should constitute only 10 per cent of a battery by 2025, compared with 30 per cent now. By then, lithium-ion batteries may even have been superseded by solid state alternatives of the kind Toyota is working on.

Outright winners, overhyped Tesla aside, should include battery companies, such as Samsung SDI and LG Chem of Korea, and Belgium’s Umicore. These are more affordably priced at 12-26 times future earnings.

Where markets fail is in valuing externalities, notably a tolerable climate. The only fix is political action, of which bans on gas guzzlers are one fruit. The danger electric vehicles will move pollution from kerb to power plant is well known. Less attention has been paid to damage a battery boom could inflict in a scramble for African cobalt and South American lithium. That, rather than commodity shortages, could prove the real shocker.

Do you want to receive Lex in your inbox? Sign up for the weekly Best of Lex email at www.ft.com/newsletters.

Copyright The Financial Times Limited 2018. All rights reserved.