Innovation is the fuel of growth, especially when it comes to electric vehicle stocks.
I kept that in mind this past weekend as I watched Nio’s (NASDAQ:NIO) Nio Day 2021 – a major virtual event hosted by China’s most prominent and valuable electric vehicle maker, NIO.
In that event, NIO – who many consider to be the Tesla of China – unveiled multiple breakthrough innovations, such as:
- A new luxury electric sedan, dubbed the ET7, with unmatched 600-plus miles of driving range.
- A next-gen autonomous driving software stack built on Nvidia chips.
- A futuristic 150 kWh solid-state battery that unlocks super long driving range.
At the end of the event, I was left in awe, thinking: “Wow, NIO may be the most innovative company in the world today.”
It didn’t surprise me at all, then, that NIO stock surged to all-time highs following the event.
What did shock me is that a ton of other EV stocks also surged after Nio Day 2021…
That got me thinking… why? NIO didn’t mention any other automakers in its presentation. The company didn’t announce any big-time partnerships outside of the one with Nvidia. Why, then, would other EV stocks rally after Nio Day 2021?
Ultimately, I came to one answer: Because the innovation in the auto sector doesn’t stop at NIO.
Multiple companies, across the entire auto supply chain, are pioneering multiple breakthrough innovations, all at the same time.
Ultimately, these innovations will work together to flip the multi-trillion-dollar auto market on its head.
All Nio Day 2021 did was underscore that this disruptive reality is coming soon…
Take the new Nio ET7 sedan, for example. Ostensibly, it’s just another car. But it joins the Model S, the Lucid Air, the Porsche Taycan, the BMW i4, and many more in an increasingly long list of premium luxury cars without diesel engines.
In other words, the number of electric car options that prospective car buyers have is increasing exponentially – a sign of the times that one day in the not-too-distant future, there are going to be more electric cars for sale in the market than gas-powered cars.
Or, take the new autonomous driving software suite that NIO unveiled. All that new platform really does is bolster this idea that we are going to have a bunch of semi-autonomous vehicles on the road in the near future.
Meanwhile, NIO’s new solid-state battery underscores the shift from liquid battery chemistry to solid-state battery chemistry – a shift which will change how EVs are made and ultimately enable a new class of “limitless” electric cars.
All in all, NIO management may as well have just held up a sign during all of Nio Day 2021, which said in all caps: “THE AUTO WORLD IS FOREVER CHANGING!”
Because that’s exactly what is happening.
We are going from gas-powered cars, to electric cars…
From dumb, manually-driven vehicles, to smart, autonomous vehicles…
From inefficient liquid batteries, to efficient solid-state batteries.
This seismic shift is about so much more than just NIO.
It’s about all those small EV makers that are creating a new class of electric cars. It’s about all those self-driving tech companies that are enabling autonomy in vehicles. It’s about all those research labs that are experimenting with solid-state battery chemistry.
This is a rising tide. Sure, companies like Tesla and NIO will be at the front of the tide.
But… in their wake… a plethora of emerging EV, self-driving, and solid-state battery companies will emerge as titans of this new Transportation 2.0 industry.
Which ones are on my radar?
Canoo (NASDAQ:GOEV) is designing the electric car of the future, purpose-built for autonomy and made to be sold through a far more efficient and relevant subscription model. I think that company has huge potential long-term. I’m also particularly bullish on the emerging “small car” trend, and as such, am a fan of three-wheel EV pioneers ElectraMeccanica (NASDAQ:SOLO) and Arcimoto (NASDAQ:FUV).
Fisker (NYSE:FSR) is another name that stands out, as I see its Ocean SUV being a major hit among families who have long wanted an electric SUV but cannot afford a Model X.
In the commercial world, Workhorse (NASDAQ:WKHS), Lordstown Motors (NASDAQ:RIDE), Arrival (NASDAQ:CIIC), and XL Fleet (NYSE:XL) are all interesting. So are the charging companies Blink Charging (NASDAQ:BLNK) and ChargePoint (NYSE:SBE).
On the self-driving front, LiDAR makers are the best way to play this emerging megatrend. The top name in the LiDAR space is Luminar (NASDAQ:LAZR), but Aeva (NYSE:IPV) and Innoviz (NASDAQ:CGRO) are also interesting. Outside of LiDAR, thermal camera intelligence company Foresight Autonomous (NASDAQ:FRSX) also has compelling long-term upside potential.
Pivoting to battery tech, QuantumScape (NYSE:QS) is the most obvious play on the shift to solid-state batteries. But smaller battery makers like Romeo Power (NYSE:RMO) and Nano One Materials (OTCMKTS:NNOMF) are also worth watching.
Sure. That’s a lot of stocks to buy to play the shift to Transportation 2.0.
But this is no small shift. It is a multi-trillion-dollar, multi-decade shift that will result in multiple winners.
Some of those winners will follow in the footsteps of Tesla and NIO, and score 10X or greater returns in the coming years…
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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