Nothing in life is guaranteed.
Well … except death and taxes.
My fellow Pennsylvanian, Benjamin Franklin, was right about that. But those topics are no fun to talk about.
The dictionary defines a guarantee as a “promise or assurance.” And you know as well as I do … there are no guarantees when it comes to investing.
But here’s the key that so many people overlook in the day-to-day price swing…
Some trends are so close to a certainty that we could practically speak of them as guarantees.
These are the trends we talk about here at MoneyWire…
One trend getting a lot of attention right now is electric vehicles (EV). Is the growth of EVs guaranteed? I suppose not literally. But I cannot even begin to fathom a world that does not have a lot more EVs in the next five to 10 years and beyond.
The days of the internal combustion engine (ICE) vehicles that we have relied on for the last couple of centuries are coming to an end.
EVs are better for the environment, and they are about to become cheaper than gasoline- and diesel-powered vehicles. We can see the tipping point.
So regardless of recessions, bear markets, changes in political leadership, pandemics, or any other unexpected curveball, I guarantee that there will be more EVs on the road in the future.
EVs are the as-certain-as-you-can-get growth that make the future of transportation one of my favorite investment themes for the Roaring 2020s and beyond. I also call it Transportation 2.0.
It’s a massive hypergrowth theme with multiple ways to profit and tremendous upside potential. With the buzz building and so many of us getting back to travelling, let’s take a look at five of the biggest investment opportunities ahead of us as we move into the future of transportation.
Electric Vehicles: In 2020, 4.4% of all new vehicles sold around the world were electric. 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 our opportunity. The path from 4.4% of global sales to 80% of global sales will shift trillions of dollars from ICE vehicles to EVs.
Plus, many of the major auto manufacturers have aggressive EV plans — which are getting more aggressive all the time — so sales could hit 80% well before 2050.
Self-Driving Cars: The advancement and adoption of self-driving cars is not accelerating as quickly as I and other analysts originally anticipated. That happens with transformative trends, and it is when patience is critical for successful long-term investing.
But even at a slower pace, the move to autonomous vehicles (AVs) is another one of those trends that is practically guaranteed.
The number of companies racing ahead with self-driving technology shows the underlying power of the trend. Most experts see Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Waymo division as the current leader. I believe Tesla (NASDAQ:TSLA) is not far behind. And that’s only brushing the surface of the companies involved here.
Commercial AVs: In May, a self-driving, heavy duty commercial truck drove a delivery of watermelons from Arizona to Dallas. It started with a human driver who took the wheel for the first 60 minutes before sitting back and letting the autonomous truck from TuSimple (NASDAQ:TSP) continue the trip on its own. The human driver again took the wheel in Dallas to complete the drop off in Oklahoma City.
The truck made it in 14 hours and 6 minutes — 42% faster than the 24 hours and 6 minutes it would have taken a human driver.
The technology is far from perfect still, as evidenced by the need for human drivers at the beginning and the end. But longtime MoneyWire readers know that we do not invest for today or tomorrow … we invest for several years into the future.
Autonomous Ride Hailing: AVs will be able to move people as well as parcels from point A to point B at 1/10th the cost of a taxi today, according to ARK Invest. The research company goes as far as saying the 10-year net present value (NPV) of cashflows from the niche industry are more than $1 trillion today … and could be up to $9 trillion by 2029.
That is a massive opportunity we cannot ignore.
EV Charging Stations: If — or more likely when — there are more EVs on the road, there must be more EV charging stations … or a major breakthrough in battery range or some type of battery swapping arrangement. Longtime MoneyWire readers know I expect battery breakthroughs, and I think battery swaps could also work in the coming decade.
At the moment, EV charging stations are an absolute must for the EV boom.
During his presidential run, Joe Biden promised to devote $400 billion to clean energy. Battery technology and charging stations were included in that. While it may not happen exactly as the government promised, you cannot stop a technology revolution.
So here’s the bottom line…
Trillions of dollars are about to be disrupted in the future of transportation. I’m not kidding. Vehicle sales, supplies, and service are already a $7 trillion industry … and one that is about to changed forever.
Transportation 2.0 will change our lives in the coming decade. Whatever you can envision right now is only the tip of the iceberg. It’s just like 14 years ago when the first iPhone was released. Very few people imagined how that device would change our world.
And now we are on the cusp of a similar demarcation line … the very beginning of a new chapter that will again reshape the world we live in. 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.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.
