by James Brumley | January 14, 2014 10:00 am
There’s no way of denying it. When investors hear the phrase “EV” (short for electric vehicle), the first company they think of is Tesla Motors (TSLA).
And they well should. Tesla has found more success — and notoriety — in the electric vehicle market than any other manufacturer has … and its vehicles are easily the coolest electric vehicle models on the road today.
But TSLA stock isn’t the only electric car opportunity out there. There are plenty of other plays in the electric vehicle space that could be just as rewarding. Not all of them are even manufacturers; some of them are simply suppliers.
Take a look at some off-the-radar electric vehicle stocks that aren’t Tesla … but that will still benefit from the EV mega-trend.
The alliances between electric vehicle manufacturers and battery manufacturers are still being forged. That’s forcing some investors to take sides and predict which companies will win the big contracts.
The better alternative is to invest in a name that not only has a hand in the making of almost all electric vehicles, but also plays a role in making the lead-acid batteries used by conventional vehicles. That puts Polypore International (PPO) front and center.
Polypore makes microporous membranes found in the lithium-ion batteries needed to power electric vehicles. But PPO stock is a safer bet because, once again, the company also makes membranes required in traditional lead-acid batteries.
It’s not sexy, but as a supplier to Ford (F), Nissan (NSANY) and the companies that make cell-phone and laptop batteries, what Polypore International lacks in pizzazz it makes up for in consistency.
OK, Plug Power (PLUG) isn’t a pure play in the electric vehicle (i.e. battery powered) world, but it’s of the same clean-transportation ilk. PLUG makes hydrogen-powered fuel cells that can replace lead-acid batteries that power forklifts.
The technology has been successfully utilized in delivery trucks, however. In fact, Plug Power recently announced it would be installing range-extenders for 20 FedEx (FDX) delivery trucks that are currently powered by fuel cell technology.
Fuel cell-powered passenger automobiles don’t qualify as an industry yet … or even qualify as a segment of the electric vehicle industry. But if some recent news from Toyota is any indication of the shape of things to come, Plug Power (and PLUG stock) may be on the verge of a huge growth spurt.
The news from Toyota is …
… that the Japanese carmaker will be building fuel cell-powered passenger automobiles by 2015. At this year’s Consumer Electronics Show in Las Vegas, Toyota Motors (TM) unveiled plans to produce a no-emissions vehicle by next year, primarily for the California market where the state government has pledged $200 million to build 20 new hydrogen filling stations also buy 2015.
This is hardly a guaranteed tailwind for TM stock, as it’s tough to be the first to mass-produce something for ordinary consumers that up until this point has only played a niche, non-consumer role.
But if any company can make fuel cell cars common, it’s Toyota Motors. Remember, fifteen years ago the Prius was never supposed to “go over”, and now it’s one of Toyota’s most recognized and most-respected automobiles.
Polypore isn’t the only name that makes the lithium-ion batteries needed to power battery-powered vehicles. Johnson Controls (JCI) is one of the biggest providers, supplying lithium batteries for several electric vehicle makers even while maintaining its primary business as a supplier for the traditional automobile industry.
Although the electric vehicle and hybrid markets are still small potatoes relative to the rest of its battery business, that could change soon — and help boost JCI stock.
Plus, Johnson Controls is one of the few manufacturers that has room to quickly add capacity if and when electric vehicles hit a critical mass of growth.
Don’t expect to see a Kandi Technologies (KNDI) vehicle dropping off any kids at your local elementary school. The company doesn’t make full-size passenger electric vehicles, and its vehicles aren’t offered in the U.S. But what Kandi Technologies does make is practical as well as fun, even if calling them “cars” is a bit of a stretch.
Kandi manufactures what it calls an E-car, which for all intents and purposes is a battery-powered mini car. They’re street legal (at least in most places), and reasonably nice.
Of course, the E-car isn’t capable of achieving highway speeds, and they’re not good for hauling much around other than the driver and a passenger — even a trip to the grocery store could prove to be a logistics headache.
They’re still more than practical enough for a huge segment of Chinese drivers though … and have been enough to help KNDI stock soar over the last year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2014/01/electric-vehicle-stocks-to-buy/
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