How do I play the coming Electric Vehicle, or EV Boom? It is a good question. Electric cars are becoming more popular, and this will only increase once they become cheaper, with greater range and more models to choose from. The Tesla Inc (NASDAQ:TSLA) Model 3 is due out in July of this year. The Model 3 will certainly be a game changer.
Global electric car sales finished 2016 at 774,000 shipments for the year, up 40% on 2015, and representing 0.85% of the global market share. Added to this were electric bus sales, electric bike sales and even electric trucks. Just last month electric car sales reached 4.2% market share of new sales in the UK, and in places like Norway electric car market share is an incredible 35% of new car sales.
Given these trends and the rise of Telsa Inc (NASDAQ:TSLA), one must believe that EV will grow in market share over the years to come. The big question centers around the best way to gain exposure without large risk, or the best way to play the EV boom! I believe there are three good ways.
1. Buy the electric EV car manufacturers
So far in 2017 the top electric EV car manufacturer is surprisingly BMW (OTCPK:BMWYY).
As of end February 2017 they have 10,047 electric car sales, and 11% global share. The 2016 best seller of electric cars was BYD Co (BYDDY) (BYDDF). They also sell electric buses, energy storage, solar panels, and electric monorails.
Tesla Inc (NASDAQ:TSLA) was number two in 2016. Tesla just recently reported over 25,000 electric car sales in Q1 2017, meaning they are on track to exceed 100,000 shipments in 2017. Those numbers will rise again in later 2017 with the Model 3, and after that a Model Y.
Furthermore, Tesla (NASDAQ:TSLA) is a leader in the energy storage market and recently launched solar roof tiles. CEO Elon Musk has a cult like following. Finally when taken together Renault-Nissan (OTC:RNSDF) (OTCPK:NSANY) are the top performers in 2016, and the Nissan Leaf is the most popular electric car of the past 5 years.
So what’s the best way to play car manufacturers in the EV space? I’d say buy Tesla or BMW.
2. Buy the electric vehicle (EV) battery manufacturers.
The Electric Vehicle EV battery Manufacturers are going to be huge. With 14 new megafactories coming before 2020, the lithium ion battery boom is clearly on the horizon. The leading electric battery manufacturers are LG Chem Ltd. (OTC:LGCEY), Panasonic, Samsung SDI (OTC:SSDIY), BYD Co, Boston-Power Inc., Foxconn Technology Group (OTC:FXCOF) and several Chinese companies (CATL, Lishen, (CATL, Lishen, Calb).
Beyond these noted companies, Tesla Inc (NASDAQ:TSLA) is once more in the mix. Its gigafactory will allow Tesla to produce vehicles at scale while also supplying solar power storage products, or batteries, to further the development of solar roofs. Its construction has been long and costly, but could be a game-changer for Tesla stock owners.