2022 REVIEW OF THE ELECTRIC VEHICLE (EV) INDUSTRY
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
2022 REVIEW OF THE ELECTRIC VEHICLE (EV) INDUSTRY
A member of my investment club presented the below report on the Electric Vehicle {EV} industry in December, 2021. Investment club members voted at the end of his presentation on buying recommended stocks.
I AM SHARING THIS REPORT BECAUSE:
- The EV industry is here and growing faster than anyone except Elon Musk expected! There MAY be good investment opportunities listed in this report, IF YOU DO YOUR HOMEWORK.
- This report is an example of the level of study of an industry or company recommended BEFORE spending your HARD-EARNED MONEY. How long does it take you to save $5,000.00? How much time should you invest in research before risking the majority of that $5,000.00? In the majority of the cases, after spending TENS OF HOURS researching a company, I decide NOT to invest in the company.
PRESENTATION – FIVE REASONS TO PURCHASE AN EV STOCK
- An EV has one moving part, the motor. A gasoline vehicle has hundreds of moving parts. Fewer moving parts lead to less periodic maintenance, more reliability, and fewer manufacturing hours. Tesla’s is averaging ~10 hours manufacturing time per vehicle and Volkswagen is attempting to reduce production time from ~30 hours/vehicle.
- EV’s have lower emissions: Gas cars emit !157 pounds of CO2/MBTUs (million British thermal units). If charged by electricity where the utility emits CO2, EV’s emit ~76 lbs of CO2/MBTUs.
- Cost of operation: EV’s are more efficient than gasoline and cheaper to operate. Current EV’s travel ~43 miles for $1.00. Gasoline vehicles about 9 miles. Thus, the distance traveled for $1.00 is four times greater with an EV.
- The recently passed federal infrastructure bill contains $5 billion for zero & low emission buses and transit vehicles. Another $7.5 billion is directed at building EV charging infrastructure in the U.S. Current chargers require ~20 minutes. Future generations will approach approximately five minutes for a charge.
- Driving range anxiety is a reason many avoid purchasing an EV. Both Lucid & Tesla have models approaching or exceeding 500-mile range/charge.
EV STOCKS REVIEWED: TESLA, LUCID, FISKER, FORD, RIVIAN, GM, AYRO, PROTERRA
- Price appreciation: Tesla, Lucid, Fisker, and Ford, purchased four months ago, recorded a 50% to 200% return on investment {ROI}.
- Price swings: Rivian surged from ~$100.00 to $175.00 and down to $90.00 in the last few weeks. Price swings are and will continue to be volatile but buying in dips is feasible.
- Price-earnings ratio: From 6.5 (GM) to infinite (Rivian).
NUMBER VEHICLES MANUFACTURED
TESLA {TSLA}: ~800,000 PER YEAR
LUCID {LID}: ~17,000 Orders – 2021 Motor Trend Car of the year
FISKER {FSR}: Prototype revealed @ 2021 LA auto show
FORD {F}: Produced Zero EV’s in 2021. Investing ~$5.6B in a western Tennessee plant for a full lineup by 2025
AYRO {AYRO}: Produced Zero EV’s in 2021. Concentrates on short-distance light-loads, delivery vans
GENERAL MOTORS {GM}: Aggressive investment, moving to a full lineup by 2025
RIVIAN {RIVN}: In 2021, will deliver ~600 of 1,000 planned vehicles due to supply chain issues. Amazon ordered 100,000 delivery vans. Amazon & Ford own significant stakes in Rivian.
PROTERRA {PTRA}: Produced > 1,000 VEHICLES – Buses, School Buses, and Trucks
EV STOCK PRICES, FINANCIAL METRICS AND ANALYSTS RATINGS
BUY RECOMMENDATIONS: FORD AND AYRO
Ford’s stock price has risen significantly in the last three months. Ford recently announced an EV factory in Western Tennessee, totaling a ~$5.6 Billion investment. Ford plans EV’s to become 40% to 50% of their lineup, with EV production at 600,000 per year in 2023.
Ayro: Manufactures Short distance / light-load delivery trucks. Stock price dropped significantly after management admitted manufacturing and costs problems are more difficult than expected.
ADD TO CLUB’S WATCH LIST: PROTERRA AND FISKER
Proterra: Infrastructure bill dollars for electric busses priced in. Recommend adding to club watch list for $10.50 purchase. A 12-month return of 50% is possible.
Fisker: Recently introduced a well-received prototype car at the Los Angeles auto show.
RE-EVALUATE IN THREE TO SIX MONTHS: TESLA, RIVIAN, GM
Tesla is the current leader. Many of Tesla’s stock analysts believe priced too high.
Rivian: Ford (12%) and Amazon (20%) own 32 percent of company. Rivian, IPO opened at $78.00, surged to $175.00, then in one week dropped to ~$90.00. Today (December 21, 2021) is ~$96/share.
GM: Investing heavily in EVs. Has an established dealer and maintenance structure in place. Also has lowest price-to-earnings P/E ratio compared to other EV listed firms.
CONCLUSION – 2022 REVIEW OF THE ELECTRIC VEHICLE (EV) INDUSTRY
THE ELECTRIC VEHICLE INDUSTRY IS HERE TO STAY, SO DO YOUR RESEARCH BEFORE INVESTING YOUR HARD-EARNED MONEY!
1. Governments and individuals are concerned about global warming, and some believe converting from carbon-based fuel vehicles to EV’s will help the planet.
2. Batteries are the significant cost for an EV, and that cost has been rapidly coming down. EV vehicle cost is approaching the prices of regular gas or diesel vehicle.
3. The U.S. Federal government and some states are pushing EV’s. Biden proposed $ Billions to build out EV charging stations similar to gas stations model.
4. Every major car manufacturer is investing $Billions in this technology, with many new EV manufacturers worldwide.
5. Tesla has invested in a SERIOUSLY LARGE Casting Machine that manufactures 50% of the car’s body in one solid piece. In Tesla’s new German factory, Tesla purchased an even larger casting machine to manufacture the vehicle’s body in a single piece. This single-piece casting will reduce production time and improve quality.
CLUB DECISION
The club members voted following the above presentation. I will not reveal the majority’s decision.
I personally own Tesla shares and have been a stockholder for several years. Tesla is a VERY volatile stock, meaning the stock has significant swings in prices up and down. I am typically a buy-and-hold investor, and still hold over 90% of the shares I purchased. I utilized some profits to buy additional real estate assets.
I also owned one Chinese EV stock, in 2021 and sold at break-even. The stock’s up and down movements (mostly down in 2021) were too volatile. China is cracking down on industry making their stock price movements erratic.
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Wilson’s No-Kill Animal Shelter: https://wcnkas.org
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation.As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
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