How Investors Can Get in on the Expanding Electric Vehicles Market

electric vehicles

Electric vehicles are gaining popularity at a rapid pace, propelled by growing affordability, cutting-edge technology, and a global push to reduce carbon emissions. With more and more auto giants looking to enter the electric vehicle game, the number of electric vehicles on the market is expected to increase significantly over the next few years.

In fact, according to McKinsey & Company’s Electric Vehicle Index, global sales of new electric vehicles passed a million units for the first time in 2017. What’s more, under the current growth trajectory, electric vehicle producers could quadruple that number by 2020 up to 4.5 million units and reach a whopping 11 million units by 2025.

The Chinese market, in particular, has grown by 72%, making it a larger EV market than the US and UK combined. Interestingly, the demand for electrical vehicles remains low in the US, with fully electric or plug-electric hybrid models accounting for only 2% of US auto sales in 2018.

Despite US consumer resistance, a number of automakers are pushing ahead with plans to produce new electric vehicle models. This makes sense considering new government regulations in the US and around the world are being passed in a bid to control carbon emissions, meaning an increased demand for electric vehicles is inevitable. Still, concerns about charging infrastructure, pricing, and battery performance will likely keep full-on adoption at bay, at least for the time being.

There are a number of companies looking to alleviate concerns regarding the lack of electric vehicle charging stations. In fact, the market for electric vehicle charging stations is also projected to grow significantly in the next four years and reach $5 billion by 2023.

Investors who are interested in the space can get in on the action a couple of different ways. Of course, they can opt to invest in those automakers who are creating EVs. However, choosing companies that manufacture vehicle parts and batteries, supply raw material, or build charging infrastructure might be a more cost-effective option for gaining portfolio exposure.

Let’s take a look at the automakers dominating the space and the companies that provide parts, technology, and infrastructure for electric vehicles.

Automakers Creating Game-Changing Electric Vehicles

Tesla Inc. (NASDAQ:TSLA) remains the dominant player in the space, accounting for more than a third of electric vehicle sales in the US last year. The industry leader set out on an ambitious plan to build 1 million electric vehicles by 2020 and currently offers its Model 3 at an affordable starting price of $35,000. Tesla’s EVs also offer the longest electric range, with the Model S able to drive 335 miles on a single charge and the Model 3 having a range of 310 miles.

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Despite Tesla’s industry dominance, there are a number of automakers rolling out impressive electric vehicles to the market. Hyundai Motor Co. (OTC:HYMTF) is one company that is receiving a ton of attention for its EV offerings. Its 2019 Hyundai Kona EV was just voted Best Electric Vehicle by US News thanks to its efficiency, while the 2019 Hyundai Ioniq was named Best Hybrid Car. Not only are these cars being ranked as top performers in the EV space, but both also cost less than $37,000 USD.

German luxury vehicle maker, BMW (OTC:BYMOF) has also created an electric vehicle for the market, a plug-in hybrid called the BMW i3. This futuristic hybrid can drive for 126 miles without any gas, making its electric range superior to any other luxury plug-in hybrid.

Toyota Motors Corp. (NYSE:TM) isn’t new to the EV market, as its Prius hybrid plug-in models have been well-known in the space for quite some time. Still, the company has continued to dazzle the market by optimizing the efficiency of its electric vehicles. The 2019 Toyota Prius Prime was voted Best Plug-in Hybrid in the US thanks to its class-leading fuel economy features.

Nissan Motor Co Ltd (OTC:NSANF) also launched an affordable EV that starts at $30,885 USD. What’s more, the Nissan Leaf has the ability to drive up to 226 miles on a charge.

NIO Inc. (NYSE:NIO), which is known as the Tesla of China, is another EV manufacturer that is making big moves in the electric vehicles space. As of December last year, the company rolled out 11,348 of its ES8 electric SUVs. NIO also announced its second electric SUV model in December.

Oregon-based electric vehicle company Arcimoto Inc (NASDAQ:FUV) is bringing something unique to the EV space with its three-wheeled electric vehicle. In February, the company announced that it had over 3,000 pre-orders for its fun utility vehicle (FUV).

Companies on the Mining, Tech, and Infrastructure Side of the EV Boom

As mentioned, investors may want to consider looking at the behind-the-scenes companies in the electric vehicles space for their portfolio. From lithium and cobalt miners (two essential elements for lithium-ion batteries) to EV charging station manufacturers, there are plenty of companies involved in the electric vehicles market.

One of these is Plug Power Inc (NASDAQ:PLUG), a battery company that manufactures hydrogen fuel cell batteries used in electric vehicles and many other types of electronic equipment. The company owns 95% of the current market share for hydrogen fuel cells and has some impressive blue chip customers like Walmart (NYSE:WMT), IKEA, and P&G (NYSE:PG). Plug Power’s stock has risen 35.26% over the last 12 months, and the average rating from Wall Street analysts is a “Moderate Buy.”

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In terms of electric vehicle mining, Explorex Resources Inc. (CSE:EX) (OTC:EXPXF) is focused on the acquisition of projects with elements critical to electric vehicle batteries. It boasts two projects within the Cobalt Embayment in northeastern Ontario, which is estimated to hold 15,000 tonnes of copper. Explorex Resources signed a strategic partnership with Ganfeng Lithium Co. (OTC:GNENF), one of the largest manufacturers in the world, which will see Ganfeng provide the company with a $1 million investment.

Vancouver-based Lithium Americas Corp. (TSX:LAC) (NYSE:LAC) is another mining company that is set for success thanks to the EV boom. The company has claimed that it is the largest known lithium resource in the US and the next large-scale lithium mine, with a reserve of 3.1 million tons of LCE at 2.358 ppm Li.

If you are interested in companies that build electric vehicle charging stations, Webasto, formerly AeroVironment (NASDAQ:AVAV), is one of the top electric vehicle charging station manufacturing companies in the world.

Another company creating EV charging stations is Envision Solar International, Inc. (NASDAQ:EVSI), all of which are solar powered. The company partnered up with ChargePoint in 2015 and has developed a number of solar-powered EV charging stations in the US.

Blink Charging Co (NASDAQ:BLNK) is a Miami-based company that is a leader in electric vehicle charging equipment and networked EV charging services. The company not only builds charging stations, but it also has proprietary cloud-based software that operates, maintains, and tracks all of the EV charging stations connected to the network.

It will be exciting to see how the world will transform as more and more electric vehicles hit the road. It will also be interesting to see how the demand for charging infrastructure will be met.

Featured Image: DepositPhotos © antb