A renewable energy infrastructure is well on its way to being built. However, patient investors still have time to get involved with green transportation stocks.
Fossil fuels will still be needed for decades to come. Therefore, traditional energy stocks will remain solid investments, particularly for the income generated by their dividends.
However, growth-oriented investors may want to look at green energy investments. At this point, they face a more favorable regulatory environment that will ease adoption. And no matter what the election brings this fall, the sector is quickly reaching a critical mass, if it hasn’t already.
In 2024, the focus of green transportation remains electric vehicles. But investors are starting to see other areas, such as the emerging flying car space. Hydrogen is also gaining momentum, but it still seems like a cost-efficient payoff remains years in the future.
The bottom line is that investing in green transportation stocks is a long-term play. But if you have the patience to wait on the payoff, here are three stocks to consider.
Tesla (TSLA)
As of January 31, 2024, Tesla (NASDAQ:TSLA) stock is down more than 20% in 2024. Most of that drop occurred after the company’s “train wreck” of an earnings report, which disappointed the top and bottom lines. To make matters worse, the company posted a nearly 50% drop in gross margin and threw cold water on the EV outlook for 2024.
Ok, and then what? Tesla is still the head-and-shoulders leader in the EV space. The competition will play catch-up in an environment with a higher interest rate. And it’s not as if Tesla is resting on its laurels. The company plans to build a less expensive, mass-market compact crossover scheduled to start delivery in mid-2025.
The vehicle is being built with China clearly in mind. That’s where Musk views the real competition. That is becoming evident as BYD (OTCMKTS:BYDDF) overtook Tesla as the world’s top-selling EV company.
That being said, 2024 may be a rough year for the EV sector and TSLA stock in particular. But if you’re playing the long game, it’s hard to think that Tesla won’t remain a standard by which many green transportation stocks are measured.
Vertical Aerospace (EVTL)
Looking beyond the EV market, flying cars, or electric vertical take-off and landing (EVTOL) vehicles, are becoming a reality. And Vertical Aerospace (NYSE:EVTL) is one of the emerging publicly traded names in the sector.
First things first. Vertical Aerospace is a penny stock that currently trades for around 72 cents a share. The company has received a delisting warning and has issued a going concern warning to investors. This is not a stock without risk.
Now, the good news. The company has a prototype unit, the VX4, has logged over 1,000 test flights. It is targeting 2025 as the year it can receive FAA certification to begin commercial operations.
If successful, existing partnerships with American Airlines (NASDAQ:AAL) and Virgin Atlantic will help bring revenue through the door. Boeing (NYSE:BA) and Microsoft (NASDAQ:MSFT) are also investors. That revenue will be essential because, as it stands now, the company will need an infusion of cash by the end of the year.
Blue Bird (BLBD)
Blue Bird (NASDAQ:BLBD) is a niche player among green transportation stocks. Specifically, the company manufactures school buses, including electric school buses. One of the recent bullish headlines for the stock is an order for 180 electric school buses from the Los Angeles school district.
According to the company’s investor presentation, 60% of the company’s sales are of the non-diesel variety. Its competitors can only cite 10% to 20%.
That’s a significant advantage as the addressable market will likely increase significantly in the coming years. Remember, like many delivery vehicles, school buses frequently don’t need to travel long distances, making them less susceptible to range anxiety.
Revenue and earnings have been increasing year-over-year (YOY). And in fiscal year 2023, Blue Bird turned a 23% net loss into a 19% net profit. That’s one reason that BLDB stock is up 102% in the last 12 months.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
