How to Invest in
Electric Vehicles
Noticing more and more Teslas on your daily commute? You’re not the only one.
While there’s still a ways to go before EVs completely take over the streets, it’s no doubt that now’s the time for investors to take stock of the space and think about long-term plays.
EVs by the Numbers
2030 Projected % of Car Sales Worldwide
Present Day % of Car Sales Worldwide
2040 Projected % of Car Sales Worldwide
EVs
Gas-Powered
97%
Gas-Powered
EVs
3%
Gas-Powered
72%
EVs
28%
EVs
58%
Gas-Powered
42%
Source: BloombergNEF
Tesla
Toyota
Porsche
BYD
$614
$195
$113
$111
$83
$81
Mercedes-Benz
Volkswagen
BMW
GM
Stellantis
Ford
$70
$58
$54
$52
Biggest Auto Manufacturers by Market Cap
Notice that two
of the top four companies are pure EV manufacturers (Tesla and BYD), while every other company in the top ten either has some EV models or plans
to offer an EV soon.
(Data as of 2/13/23)
Source: Kelley Blue Book
Tesla Model Y
191,451
Tesla Model 3
156,357
Ford Mustang Mach-E
28,089
Tesla Model S
23,464
Chevrolet Bolt
22,012
EVolution:
Best-Selling EVs of 2022 in the U.S.
1889:
The first successful electric vehicle is introduced in the U.S. by creator William Morrison. It becomes quite popular due to the fact that it was quiet and cleaner than the steam- and gas-powered buggies of the time.
1899:
EVs become so popular that they outsell all other types of cars. Over 90% of New York City taxi cabs are electric at the time.
1889
1899
1913:
Henry Ford begins using a moving assembly line to mass produce gas-powered Ford cars, making it possible to build a Model T car in 90 minutes. Gas-powered cars start selling for much cheaper than EVs in the years to come.
1913
1930s
1996
2008
2017
2021
1930s:
As America builds a huge network of roads and filling stations alongside them, cheaper gas-powered cars take over and the EV all but disappears for decades.
1996:
GM begins leasing the EV1, the first mass-produced electric vehicle from a major auto manufacturer. They discontinued the EV1 in 2002, citing unprofitability—then recalled all EV1s still on the road and crushed them.
2008:
Tesla makes its way into the EV space with the Roadster, an all-electric sports car with a groundbreaking range of 240 miles per charge. The Roadster costs upwards of $100,000, so it’s not quite the mass-market affordable EV that many had hoped for.
2017:
The Tesla Model 3 goes on sale. The car starts at a price of around $35,000 and goes up to 200 miles on a full charge, fulfilling a long-held goal of CEO Elon Musk to create a Tesla that’s comparable in price to new gas-powered cars.
2021:
Ford announces an all-electric version of its F-150 pickup truck, which has long been the best-selling car in America. It’s a big departure from the reputation of EVs as tiny, funny looking and underpowered, as its base model sports 426 horsepower and a 2,000 lb. payload.
EV Companies:
EVs are taking the spotlight this decade with around 200 new models set to launch in the next 5 years.
Tesla (TSLA)
When it comes to EV stocks, there’s a clear leader: Tesla. However you feel about outspoken CEO Elon Musk, it’s undeniable that this stock went on an epic run from 2020-2021. During that time, TSLA’s stock price soared from 83.67 (split-adjusted) to over 1,000.
Can the largest auto company in the world sustain that momentum, or are some of its upstart competitors poised to eat into its market share?
With financial backing from Ford and Amazon, Rivian is one of the strongest EV startups right now. Their R1T electric pickup truck was named Motor Trend’s 2021 Truck of the Year.
Rivian (RIVN)
Two versions of the Lucid Air sedan are on the market right now and boast a range of over 500 miles with a 1,100-horsepower engine. It’s expensive at $160k, but the company has plans to create more mainstream sedans and SUVs.
Other stocks to watch: Fisker (FSR), Canoo (GOEV) and Faraday Future (FFIE)
Lucid (LCID)
Often called the “Tesla of China” for its high-end designs, Nio has been publicly traded since 2018. The company more than doubled its sales in 2021 and boasts great momentum with launch plans for three new car models in 2022. They’ve been able to offer their vehicles for a much lower price than Tesla due to Chinese government subsidies.
Nio (NIO)
Another Chinese EV stock has a solid lineup for such a new company—with two models each of electric SUVs and sedans. XPeng is backed by Chinese tech giant Alibaba (BABA).
XPeng (XPEV)
Though there’s not as much hype with this name, BYD’s EV and hybrid sales combined are practically equal to Tesla’s. They’re way ahead of NIO and XPeng in sales, and they’re backed by Warren Buffet. BYD manufactures its batteries in-house; in fact, Ford and Toyota plan to use BYD’s batteries in their EV models.
BYD (BYDDF)
The company already has over 200,000 reservations for their F-150 Lightning, the all-electric version of their massively popular pickup truck. The industry giant also announced an interest in separating EV operations from their legacy business––a spinoff that could be very interesting to EV investors.
Ford (F)
The German auto giant is gaining ground in European and North American EV markets. They are now the third-largest manufacturer of EVs worldwide, owning about 10% of the overall market share. They already offer EVs from their Porsche and Audi brands, and they’re going ultra-luxe with a Bentley EV in 2025 and a Lamborghini EV in 2029.
Volkswagen (VWAGY)
The largest auto manufacturer in the world for over seven decades, GM experienced a swift fall and, in 2009, reorganized under Chapter 11 bankruptcy. They’ve since turned things around, with plans to invest nearly $35 billion in EV/AV development through 2025 and completely stop producing internal combustion engine cars by 2035.
Other stocks to watch: BMW (BMWYY) and Toyota Motor (TM)
GM (GM)
Present Day
2030
2040
Under the Hood:
The
Startups
The
Leader
Chinese Companies
Legacy Automakers
With so many automakers racing to produce electric cars, the demand for EV batteries is bigger than ever and has quickly outpaced the supply.
FACT #1
FACT #2
FACT #3
FACT #1
Those batteries need to be charged, preferably quickly and conveniently.
FACT #2
FACT #3
FACT #1
FACT #2
The EV space doesn’t stop just at automakers - there are many more stocks that stand to benefit as picks-and-shovels plays. From charging equipment to batteries and their rare-earth ingredients, EVs need these essential components to operate.
FACT #3
China also controls around 70% of the global production of rare earth metals.
The battery
is the most expensive part of an electric car.
The resources needed to make these batteries have skyrocketed in price.
China currently produces almost two-thirds of the world’s lithium-ion batteries.
Here are the most important elements of an EV battery and the companies that produce them.
Lithium
By 2027, the lithium market size is anticipated to reach $6.19 billion with an 8.1% growth rate from 2021-2027, according to Valuates Reports. With prices set to increase 50% by January 2023, it’s a rapidly growing space for investors.
STOCKS: Albemarle (ALB), Sociedad Quimica y Minra (SQM), Livent (LTHM)
ETFs: LIT, BATT
Nickel
This “green metal” is responsible for increasing an electric car’s driving range—a major struggle for early EVs. In March 2022, nickel prices surged following foreign instability and a short squeeze.
STOCKS: Vale (VALE), BHP Group (BHP)
ETFs: JJN, PICK, GMET
Cobalt
This metal both increases the EV battery life and its energy density, meaning it keeps the battery’s structure together. This makes the battery better equipped to handle the charge-discharge cycle it uses to operate.
STOCKS: Glencore (GLNCY), Vale (VALE), Wheaton Precious Metals (WPM), Carpenter Technology (CRS)
ETFs: BATT, PICK, DMAT
The Charger
Battery-operated EVs would be useless without places to charge them. While you can charge most EVs with a standard wall outlet, it’s very time-consuming. This is why we see more and more public fast charging stations as the number of EV owners rises.
Once a rarity, charging stations are now becoming a common sight in parking lots and parking garages. While it’s not like pulling into a gas station and filling up in a few minutes, charging stations offer the convenience of plugging in and charging while you’re working, shopping or otherwise going about your day. And while you pay for the privilege, it’s almost always cheaper than the cost of gas.
These publicly traded companies are currently the largest in the charging space and expanding their infrastructure rapidly.
Tesla’s Supercharger stations (30,000+ locations) boast the ability to charge a battery with 200 miles of range in just 15 minutes for less than the price of gas.
Currently has the largest public EV charging network in the U.S. with 800 dedicated fast-charging stations in 34 states.
Has more than 163,000 activated chargers across North America with plans to expand into Europe—the company announced a partnership with France to install over 1,400 stations across the country.
(click on Logos)
EVgo (EVGO)
Tesla (TSLA)
ChargePoint (CHPT)
The Battery
Investing in EV Components
Drivers, Start Your (Quiet) Engines
The Rise, Fall and Rise of Electric Vehicles
(in billions of dollars)
Units Sold
Units Sold
Units Sold
Units Sold
Units Sold
(Hover over PINS for more info)
Li Auto (LI)
This Beijing-based EV maker competes with Tesla and Nio in the high-end EV market. Their flagship SUV, the Li ONE, was one of the top-10 selling cars in China in 2020 regardless of fuel type. The stock jumped considerably in June 2022 following strong vehicle delivery reports and the unveiling of a new hybrid SUV model, the Li L9.
XPeng (XPEV)Li Auto (LI)
This Beijing-based EV maker competes with Tesla and Nio in the high-end EV market. Their flagship SUV, the Li ONE, was one of the top-10 selling cars in China in 2020 regardless of fuel type. The stock jumped considerably in June 2022 following strong vehicle delivery reports and the unveiling of a new hybrid SUV model, the Li L9.
$52
$54
$58
$70
$81
$83
$111
$113
$195
$614