Electric cars are being developed at an amazing pace. 3.1 million electric cars were sold in 2020. This is a rise in sales of 39% compared to 2019. The overall car market plunged by 14% in 2020.
It's easy to see that electric car stocks are continuing to rise. This doesn't just include electric vehicle stocks but related commodities as well. Read on to find out what the expectations are for the electric car market and related commodities markets so you can get in on the profits, too!
Trends in Electric Car Stocks
Established car companies are offering a wider selection of new electric vehicles. Ford is investing $22 billion dollars over a five-year period to create a varied line of electric vehicles. Their current offerings include the Mustang Mach-E and the new F150 Ford Lightning.
GM is working to turn all its new cars into fully electric models by 2027. With investments of $27 billion over the next 5 years, they expect to offer 30 different EV models in five years.
Overall, 2020 saw a small decline in electric vehicle stocks, with Tesla dropping 12% within the last few months, and 19 electric vehicle specialists experiencing a 15% drop in the market. However, Tesla stock is still up over 4 times what it was in 2019, even with the drop.
U.S. and Chinese Subsidies
Biden's administration has proposed an investment of $174 million in the electric car market to boost research and development. China has invested $60 billion and expects to transition to all electric vehicles by 2035.
With a focus on clean energy and reducing carbon emissions, China continues to dominate the electric car market. China outsold the U.S. on electric cars by over a million units. However, U.S. automakers - large and small - are doing their best to keep up.
Estimates include that by mid-century, there will be over 400 electric vehicle models available worldwide. Expected electric vehicle sales will be between six and 11 million units and 19 million electric cars sold by 2030.
Related Stocks and Commodities
Recently, the auto industry has had a hard time coming by the electronic components needed for their vehicles. This is true for electric cars as well. Battery technology is one of the fastest-growing fields and creates investment opportunities on its own.
Blink Charging, which creates and owns electric vehicle charging stations has experienced a rise in its stock of over 1509%. They've recently acquired Blue Corner, a charging company in Europe.
FaceDrive is a ridesharing company (among other focuses) that is committed to lowering its carbon footprint through its offering of electric vehicles. The innovative company is largely in Canada, Washington D.C., and is hoping to expand into Europe soon.
Commodities that are hot for the electric car market right now metals used in electronics and battery components for the cars. 183 pounds of copper is used in making an electric vehicle. Other metals that are going up in demand are platinum, palladium, and lithium.
As the market continues to grow, expect demand to drive up the price of metals and green-focused rideshare companies.
Up and Coming Companies
The top five contenders for the electric car market (and rising stocks) are the China-based Nio Inc., Xpeng Inc., and Li Auto Inc. Next are Ford and GM, established companies who are expanding their commitment to the electric market.
Among the companies that are making commitments to buy fleets of electric vehicles or investing in electric engines are Amazon and the United States Postal Service.
Amazon is investing over $700 million in Rivian to power its own electric fleet of delivery vehicles. Rivian's current offerings include an SUV and truck . The USPS has signed a multibillion-dollar deal with Oshkosh for the delivery of electric mail trucks over the next 10 years.
Even United Airlines is getting in on the electric craze in a $1 billion deal with Archer Aviation to engage a fleet of electric air taxis for short-distance hauls.
Crunching the Numbers
IHS Market estimates that 23% of the total global car market will be battery electric vehicles by 2030. The European Union market is estimated to be 30% of total vehicles sold in 2030. Even VW is expecting to go completely electric by 2040.
The major issue with Battery-powered Electric Vehicles (BEV) is one we see with all new technology. Price points for BEVs are very high and worries about the driving range and availability of charging stations continue to keep many from buying them.
Solid-state manufacturing is quelling the range issues. The charging network is becoming increasingly more available thanks to multiple companies that are expanding.
While companies are working to make more efficient batteries and components, many countries are banning new gas vehicle sales by 2035 and 2040. These include substantial government subsidies for buyers in form of tax rebates or incentives.
While estimates are varied due to the anticipated shortage of battery components, the International Energy Agency expects as much as 58% of the market worldwide to be BEV by 2040.
Good Investment in Electric Car Stocks
With all the expected growth in electric car technology and green energy, purchasing electric car stocks and related technology companies looks to be a strong bet in the long run. While Coronavirus had a slowing effect on the market overall, stocks continue to rise in value.
Now is an interesting time to consider investing in EV stocks such as Canoo, Tesla, Oshkosh, and Rivian. It's also a great time to jump into the electric battery industry and charging station companies. Moving to battery platforms will require a serious shift towards these additional infrastructure items and those with plans in place will have a major head start. Chinese companies Nio, Xpeng, and Li Auto are expected to lead the pack in both innovation and sales.
Archer Air is going to be one of the leaders in the electric short-haul aviation industry. Because of the previously mentioned partnership with United Air, Archer is likely to show some significant growth over time.
It's a growing field of opportunity for businesses and investors alike, and the electric car market is only going to keep growing. If you think you'd like to trade in your car for a new battery-powered electric vehicle, we invite you to get a free estimate of your car's worth today!
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