Last Friday, I told you that – while electric vehicles are poised to take over the world – most electric vehicle (EV) startups will fail.
The logic is simple. There are hundreds of EV startups out there today. Yet, history and common sense tell us that, when all is said and done, the electric vehicle industry will consolidate around a handful of winners. The transition from where we are today (hundreds of EV startups) to where we will be by 2030 (a few EV giants) means that most EV startups will fail.
Easy enough, right?
So, in that light, I detailed three EV stocks you need to sell before you potentially lose everything by betting on the wrong horse in this race. To find out the names of those three stocks, click here.
But that’s only half the story…
The Rest of the Story in EV Stocks
Avoiding the losers will only save you from potentially huge losses. To strike a fortune in the EV Revolution – and trust me, there is a fortune to be made here – you need to buy the winners.
You need to pick the right horses in this race.
That’s a tall order. After all, we’re talking about picking out the five or six winners in an industry that’s bound to have hundreds of losers.
But I’ve come up with a process to help you do just that… and along the way, potentially score life-changing returns. Fortunately for you, that process is very simple, and I’m going to share it with you, right now.
To find the winners in the EV Revolution, you need to go through the following checklist, and make sure the company checks off every single one of these boxes:
- Management. A solid EV company will have a smart, experienced, talented, and visionary management team that can both tell a good story about their product and execute on that story. Those are the companies that will attract the talent and investment dollars to build great EVs.
- Technology. In EVs, the technology is everything. If the underlying technology is poor and/or commoditized, then the company will produce undifferentiated cars that don’t go very far, take forever to recharge, and have no “umph” – those cars will ultimately have little to no demand. But, if the underlying technology is solid, then the company will produce long-lasting, fast-charging, unique EVs with some serious power – those cars will have huge demand. So, find a company in the EV space that has some interesting underlying and preferably proprietary battery, platform, or charging technology that will result in higher-performance vehicles.
- Resources. Another big headwind EV companies will run into is the supply chain. That is, to scale production, EV companies must secure lithium suppliers, build out production factories, land component partnerships, and more. Doing so requires a lot of resources – and if the balance sheet is empty, the company will have a tough time constructing a supply chain big enough to ensure its long-term success. Find a company with a lot of resources, a big balance sheet, and the ability to tap more dollars if the need arises.
- Branding. This is probably the least important item on the checklist, but nonetheless, it’s still very important. Consumer-facing products need to be supported by a strong brand… or else they fail. The EV landscape of tomorrow will look very much like the auto landscape of today. You’ll have some premium brands. You’ll have some sporty brands. You’ll have some functional brands, some budget brands, and some family brands. Successful EV companies will appropriately orient their brand into these predefined niches and create a car that matches that brand.
By using this simple checklist, you can separate the wheat from the chaff in the EV industry – and find the next 10X investment opportunity in the auto market.
The Best of the EV Leaders
You know who checks off these boxes? Tesla (NASDAQ:TSLA).
CEO Elon Musk and his C-Suite are the quintessence of a talented, experienced, and visionary management team that can spin a good story. Musk himself is also like a magnet for attracting engineering talent.
The company’s battery technology is unrivaled. Its cars have the longest ranges in the market, recharge the fastest, and have the most horsepower. The balance sheet is loaded with billions of dollars in cash, and there is no shortage of money in the equity and/or debt markets that will willingly finance this company if a cash crunch were to ever happen. Tesla is also in the process of building a gigafactory on almost every continent.
And the brand… well, Tesla cars have been the coolest the cars in the automobile world for several years now…
It’s no wonder that Tesla stock has soared 15X over the past five years.
Can you guess who else checks off these boxes? NIO (NYSE:NIO).
The company’s CEO – William Li – is a brainiac who many consider to be China’s Elon Musk. His talented team has spun up the great story of NIO being the “Chinese Tesla,” which has both attracted tons of investment dollars into the company and made NIO a top engineering destination.
The company’s battery tech is second presently to only Tesla. The balance sheet has tons of cash – with tons of equity and debt backers willing to inject more down the line if the company needs it. Production capacity is quickly ramping.
And as for branding, well let’s just say that NIO’s swanky clubhouses have done a great job of making NIO owners feel like they’re the coolest people on the planet.
It’s also no wonder that NIO stock has soared 16X in just the past year.
You know who else checks off these boxes? Lucid Motors (NASDAQ:LCID).
A lot of the same folks who built Tesla are now working at Lucid Motors, including the chief engineer of Tesla’s first flagship car, the Model S. At the same time, a lot of folks who were heavily involved in the development of many of Apple’s greatest products – including the iPhone and Mac – are now working at Lucid Motors.
This company’s talent is second-to-none in the EV industry.
The company’s proprietary LEAP technology platform has enabled the creation of the Lucid Air – which, from a specification perspective, is the best EV in the world. It’s the only electric vehicle with 500-plus miles of driving range, has the fastest acceleration speed in the industry, and recharges as quickly as any other vehicle out there. It’s also one of the best and most smartly designed EVs in the world.
Oh, and the company was just injected with over $4 BILLION in cash from its SPAC merger, and it is backed by the deepest pockets in the world – the Saudi Arabia Public Investment Fund. Not to mention, the company is perfectly positioning itself as a post-luxury car maker that should foster exceptionally high brand equity due to its exclusivity, flashy showrooms and cars, and limited supply.
It’s no wonder Lucid Motors stock has more than doubled since rumors first broke that the company was going public through a SPAC merger.
Clearly, our checklist works… but NIO, Tesla, and Lucid Motors won’t be the only big winners in the EV race.
We actually think that there are seven other EV companies out there that will turn into enormous long-term successes.
The best part? Unlike Tesla, NIO, and Lucid Motors, these seven EV stocks have yet to really soar… meaning they still have big potential. We’ve put all 10 of these stocks – including NIO, Tesla, and Lucid Motors – into an exclusive portfolio dubbed Next-Gen Mobility, which we feel represents a collection of the most explosive investment opportunities in the EV Revolution.
Thanks to falling costs, shifting demand, forward-thinking legislature, and improving technology, the global stage is set for a new era of mobility, wherein electric, connected, and autonomous transportation vehicles become the global norm.
Within this megatrend are next-generation mobility stocks that could post Tesla-, NIO-, and Lucid-like returns, including a secret startup that’s spearheading the self-driving revolution, and a company I consider my EV “sleeper” stock of the decade.
To see my entire lineup of innovative next-generation EV stocks, become a subscriber of Innovation Investor today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the theme of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative cutting-edge stocks, become a subscriber of Innovation Investor today.