For more than three quarters of a century — from 1931 through 2007 — General Motors (NYSE:GM) was the largest automaker in the world.
It was so dominant that its president, Charles Wilson, famously said…
What’s good for General Motors is good for the country.
That’s actually a summary version of a longer quote, but you get the idea.
Don’t look past General Motors, though. Its stock performance has more than tripled Toyota’s over the last year, and it is ramping up its spending and efforts in the indisputable future of vehicles…
I’ll give you one guess as to what that future is. If you’re a regular MoneyWire reader, you probably already know…
Electric vehicles. EVs for short.
The future of transportation is one of my favorite transformative trends for the Roaring 2020s. The upside potential is incredible with trillions of dollars likely to move into the industry.
The stunning truth is that transportation has not seen a major disruption since the transition from horse and buggies to internal combustion engines. Back in the 1950s when GM was king, you pulled into a gas station… and had a well-dressed attendant fill your tank.
You still pull into a gas station today, but in most places you have to pump your own gas.
That’s about to change, though…
Get ready to say goodbye to gas stations and hello to charging stations, as the next cycle of the transportation industry will rely heavily on electric vehicles.
And that’s exactly why General Motors just significantly increased its spending on electric vehicles — and autonomous vehicles, too, which we just talked about in yesterday’s MoneyWire.
GM announced it would bump spending up 30% to $35 billion over the next three-and-a-half years. And that comes after the company said in November it would increase its spending from $20 billion to $27 billion.
So since March of 2020, before the pandemic shut everything down, GM has now increased its spending on electric vehicles through 2025 by 75%. Companies don’t do that if there isn’t a big opportunity there.
It’s not just GM, either.
Ford (NYSE:F) recently raised its spending on EVs to nearly $35 billion. Volkswagen (OTCMKTS:VWAGY) plans to spend $40 billion through 2025. Toyota is hard at work developing next-generation batteries and vehicles. And so is just about every other car maker on the planet, unless they simply aren’t paying attention.
There are no guarantees in investing, but I cannot even begin to fathom a world that does not have a lot more EVs in the next five… 10… 15 years and beyond. They are better for the environment, and they are about to become cheaper than gasoline- and diesel-powered vehicles.
We can see the tipping point… and it’s a big tipping point.
Last year, less than 5% of all new vehicles sold around the world were electric. Even quick research shows how much that is expected to change.
According to Statista, 80% of new vehicles will be electric by 2050. I realize that sounds like a long way away, but those years in between are the opportunity for smart investors. The path from 4.4% of global sales to 80% will shift trillions of dollars from internal combustion vehicles to EVs.
Quite a few analysts believe the traditional automakers will not be able to avoid major disruption as EVs become the norm … and it’s true. Not every manufacturer thriving today will thrive in the next decade.
But don’t count all the big boys out just yet. Some household names will grow market share and sales and come out near the top.
With the amount of money up for grabs, newer players are also attempting to disrupt this trillion-dollar industry. At least 13 have gone public in the last year via the SPAC (special purpose acquisition company) boom. Not every company will succeed, but a few will … and they could be among the biggest winners in the EV trend during the Roaring 2020s.
No matter how you look at it, we are talking about an epic boom coming in EV sales.
The automakers are heading that direction.
Governments are heading that direction.
Consumers are heading that direction.
And smart investors are heading in that direction, too.
It is an absolutely massive opportunity that is still early, which makes it easy to miss.
Breakthrough battery technology will power the electric vehicles of the future. This hypergrowth trend is well underway, but it’s still early. That means now is the time for smart investors to get in position for the biggest profits.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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