Elon Musk’s Twitter feed must be chirping like crazy.
Tesla (Nasdaq: TSLA)’s shares have TRIPLED in the past year, breezing past the S&P 500’s 19.5% gain (as of Friday). It’s like every other car maker is running on fumes:
- Honda (NYSE: HMC) was flat.
- Toyota (NYSE: TM) gained just 14.1%.
- And Ford (NYSE: F) and General Motors (NYSE: GM) lost 4% and 13.4% respectively.
What’s the deal?
For starters, investors are realizing Tesla’s “issues” — production delays and financial losses — are mostly in the past.
The company delivered approximately 367,500 electric vehicles (EVs) last year … a 50% jump over 2018.
And just this past Thursday, Consumer Reports chose the Model 3 to be among the top 10 choices for car buyers in 2020.
Add in the excitement over Tesla’s all-electric Cybertruck — which will be released between 2021 and 2022 — and it’s no wonder investors are rabid.
But Tesla shares are grossly overbought right now.
Nevertheless, I see Tesla as a harbinger of a bigger picture … one similar to the “dot-com” boom of the late 1990s …
Like the internet, electric vehicles are here to stay.
Global electric vehicle sales rose to an all-time high of 1.2 million units between January and October 2019 … accounting for 7% of all auto sales globally.
And the global stock of electric passenger cars increased a staggering 63% in 2018 over 2017.
More than 10 automakers now have EV plans. If these plans materialize, the sector would sell about 25 million units (and more than 400 models) by 2025 … or 20% of all cars sold worldwide.
And “regular” technology companies are even joining the party …
Japanese tech giant Sony, for instance, has built a prototype electric car as part of its “Vision-S” initiative. CEO Kenichiro Yoshida sees huge growth in vehicles that are “connected, autonomous, shared and electric …”
Which brings me to another point: Automation and tech breakthroughs are paving the way for huge growth in autonomous EVs.
And because EVs run on lithium batteries … guess what that means for the price of the “energy metal”? I’ll give you one guess.
A lot has happened since the last time we looked at lithium. For starters, the two-year bear market has now become a raging bull!
Albemarle Corp. (NYSE: ALB) — a major lithium producer —saw its shares shoot up after the company reported earnings last week. At one point on Thursday, it soared to over $99 a share, closing the week with over 25% gains year-to-date.
The “EV Revolution” has prompted ETF issuers to come up with quite a few EV and battery-related funds over the past two years. This gives you several ways to tap this exploding industry.
Here are 5:
Amplify Advanced Battery Metals and Materials ETF (BATT)
This fund, launched in June 2018, provides exposure to battery components lithium, cobalt, nickel, manganese and graphite via companies that are in the business of mining, exploration, production, development, processing or recycling of advanced battery metals and materials.
Global X Autonomous & Electric Vehicles ETF (DRIV)
Launched in April 2018, this fund gives exposure to companies involved in the development of autonomous vehicle technology and electric vehicles via their components and materials.
Innovation Shares NextGen Vehicles & Technology ETF (EKAR)
This fund debuted in February 2018. It measures the performance of a portfolio of companies that have business involvement in the development or use of or investment in New Energy Vehicles and Autonomously Driven Vehicles.
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS)
Launched in January 2018, this fund follows companies engaged in the production of electric vehicles or their components … or engaged in other initiatives that may change the future of mobility.
Global X Lithium & Battery Tech ETF (LIT)
This oldest and most liquid fund invests in the full lithium cycle … from mining and refining the metal through battery production.
Take advantage of any pullbacks to grab a position!
All the best,