Anyone who knows me or has read my stuff throughout the years knows that I’m a car guy.
I’ve always liked cars… especially cars that are really nice and really fast. I have owned dozens throughout the years – and yeah, I’ve gotten a few speeding tickets along the way, too.
Overall, I’m very bullish about the massive shift toward electric vehicles (EVs), and I like that some of them will also be really nice and really fast.
But… I am also really frustrated.
My family owns an Audi e-tron. It’s nice. It’s powerful. And it’s fast (0-60 mph in 5.5 seconds).
When it works. It won’t charge anymore, after only 22,000 miles.
It has been at the dealer for about six weeks now, waiting for the approximately 740-pound battery pack to be removed for further diagnosis. The dealer has only one lift to remove the battery pack, and with other e-trons also having battery failures, we’re waiting our turn in line.
At least it’s under warranty. Otherwise, it would be essentially worthless… kind of like an old cell phone.
The fact is that batteries are not just the biggest, most important component of an electric vehicle, they are also the biggest challenge. Knowing this can help point you to the best opportunities in this unstoppable trend…
All About the Battery
EVs will have their day. There is no question about that. But as with any transformative trend, getting there will be a little bumpy at times.
Automakers know how to build the vehicle’s body, tune its suspension, adjust the brakes, align the wheels, and all of that good stuff. What they need is a battery that is safe, reliable, and can hold a charge long enough for people to want to pay for an EV.
There are three primary battery technologies in use and development right now. As I survey the EV landscape, it appears that lithium iron phosphate batteries will be utilized for city EVs, lithium-ion batteries will be used for premium EVs (Audi, Ford, Lucid, Mercedes, Rivian, Porsche, etc.), and solid-state batteries will eventually be available in limited luxury EVs from Audi, Bentley, Mercedes, Lamborghini and Porsche.
Unfortunately, these batteries are getting more expensive as demand increases for the metals needed to make them. In particular, the prices of cobalt, lithium and nickel have shot higher the last couple of years. But so have the costs of producing traditional fuel-powered vehicles as steel and aluminum prices are also up.
Money Continues to Pour Into EV Development
Higher costs are not slowing down automakers’ aggressive pursuit of EVs. The worlds second-largest automaker, Toyota Motor Corp. (NYSE:TM), just revealed this past week that it is investing an additional $2.5 billion for its Toyota Battery Manufacturing North Carolina (TBMNC) facility to support battery electric vehicle (BEV) battery production.
The $2.5 billion is on top of Toyota’s initial $1.29 billion investment in 2021 allocated for battery production at the North Carolina facility, bringing the total investment to $3.8 billion. Company management commented, “This plant will serve a central role in Toyota’s leadership toward a fully electrified future and will help us meet our goal of carbon neutrality in our vehicles and global operations by 2035.”
Toyota also reiterated its commitment to sell 3.5 million EVs by 2030, and its investment of about $30 billion in EVs over the next 10 years. The company noted that it wants to “build a supply system that can steadily meet the growing demand” for EVs.
Also this week, the new CEO of Volkswagen, Oliver Blume, said he wants to maintain and even increase the world’s largest automaker’s pursuit of electrification. The previous CEO had set goals to pass Tesla Inc. (NASDAQ:TSLA) in EV sales by 2025 and to make one of every two new cars sold be electric by 2030.
Blume is also the CEO of Porsche, which currently has the Taycan as its all-electric model. Porsche’s EV sales more than doubled in 2021.
Go for the Growth
Clearly, the EV trend continues to rev up, and we want to be in the driver’s seat when it really puts it pedal to the metal. To do this, we want to stay invested in companies that have aligned their business to profit from the EV revolution, as well as already have accelerating earnings and sales momentum.
These fundamentally superior companies with strong buying pressure are the best ways to build wealth any time, but especially now when the economy is slowing. There is still growth out there, and that’s where the best wealth-building opportunities are.
Growth does get harder to find in times like these, and if you would like my help, my proprietary analytical and ratings system helps us find the best of the best. You’ll find those stocks on my Growth Investor Buy Lists. You can click here if you’re interested in learning more.
A quick reminder before you go: The stock market will be closed on Monday, September 6, in celebration of the Labor Day holiday. The InvestorPlace offices and customer service department will also be closed.
I hope you have a wonderful holiday weekend!
Sincerely,
Louis Navellier
Editor, Market 360
P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.
On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.
What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.
Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.
It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Toyota Motor Corp. (TM)
