EV Stocks Are on Fire — and the Gains Only Go Up From Here

6 months, 1 week ago - March 25, 2022
EV Stocks Are on Fire — and the Gains Only Go Up From Here
Soaring gas prices and a vastly heightened supply of new electric car models are sparking the start of the EV Revolution

You might be worried about the direction of the stock market — and reasonably so, given tech stocks’ February plummet. But you could actually be making a lot of money in the market these days. How? By buying EV stocks.

Just look at the following chart. It graphs the returns of some of the EV stocks we own in our Innovation Investor model portfolio. As you can see, pretty much all our EV stocks are up more than 20% over the past week. One is up more than 30%. Another is up more than 50% — in just over a week!

ev-stocks

Clearly, while the market may be struggling, EV stocks are surging.

That’s the good news. The better news is that this party is just getting started.

Thanks to a confluence of soaring gas prices, elevated consumer interest in EVs, an exponential jump in EV optionality and falling battery costs, our analysis strongly suggests that 2022 will be a landmark year for the electric vehicle industry.

Essentially, EV makers are going to sell a whole bunch of EVs this year. And as they do, their stocks are going soar.

So, worry not. Our EV stocks are already up more than 20% in a week. And we think those gains will turn into triple-digit returns very soon.

Here’s why.

Soaring Gas Prices Spark Interest in EVs

Gas prices across the country are soaring. The national average price of gasoline is well above $4. In some parts of the country, people are paying north of $5 a gallon for gas.

That adds up. The average American usually buys somewhere between 500 and 600 gallons of gas per year. At $5 a gallon, then, Americans are shelling out anywhere from $2,500 to $3,000 per year on gas. Over 10 years, that’s $25,000 to $30,000 spent on gas alone.

At $5 per gallon for gas, the cost to transport yourself from point A to point B really adds up.

Naturally, amid these soaring gas prices, U.S. consumers are searching for an alternative, less expensive source of transportation.

The answer? Electric vehicles.

A brand-new study from the Zero Emission Transportation Association (ZETA) found that — with gas prices where they are today — the cost of driving an EV is now 3X to 6X cheaper than driving a gas-powered car (depending on where you live and the local cost of gas in that geography).

cost-per-mile

That’s a huge difference. And consumers are taking notice.

The following chart graphs the relative Google search volume of electric cars versus the price of gas since 2004. There is a clear correlation between the two. Unsurprisingly, when gas prices are soaring, consumers become more interested in EVs.

And today, as gas prices close in on multi-decade highs, U.S. consumer interest in EVs has soared to all-time highs.

search-ev-google-trends

Moreover, Edmunds reported that in the week of March 13, about 25% of shoppers on Edmunds.com considered a hybrid, plug-in hybrid or EV. That was up 39% from the previous week and up 84% from a month earlier.

And further, a brand-new survey from Piplsay found that 49% of Americans believe the running cost of a gas-powered vehicle isn’t affordable. And about the same percentage are considering buying an EV because of the gas price surge.

EV Stocks Will Bounce as Supply and Sales Roar

One of the biggest questions investors may have about this interest in EVs is whether that will convert into sales.

The answer is a resounding yes!

The two biggest hurdles to buying an EV over the past few years have been: 1) A lack of EVs for sale and 2) the high sticker price of those that were available.

Both of those hurdles will be removed this year.

The number of EV models available for purchase is set to grow by 38 models in 2022 — 61% year-over-year. This marks a record exponential jump in global EV supply.

So, supply won’t be a problem for EVs in 2022. Consumers considering going electric will have more choice than ever before.

consumers-uptick

Importantly, a lot of these new EV models are going to debut at prices many of us never thought possible.

Canoo is starting its Lifestyle Van around $35,000. Fisker is starting the Ocean SUV at just $37,500. Hyundai‘s Ioniq models will start around $43,000. The Ford F-1 Lightning pickup truck will start at $40,000. Kia‘s EV6 will start at $41,000, while the Nissan Ariya will start at $47,000 and the Subaru Solterra at $40,000. The Toyota bZ4x, meanwhile, will likely start at $36,000.

I’m not hand-picking examples here. Our rough analysis of the projected and announced starting prices of new EV models suggests that the average price this year could fall by about 20%!

ev-price-drop

So, not only are gas prices soaring. But a bunch of new EV models are launching this year concurrent to that spike. And the bulk of those new EVs are debuting at ultra-low, never-before-seen prices.

It doesn’t take a rocket scientist to connect those dots.

The EV Revolution is about to kick into overdrive in 2022. And certain stocks are going to absolutely soar this year!

Bet on EV Stocks

Lots of folks are worried about the U.S. stock market right now, and reasonably so.

There’s a war going on in Europe, inflation running at multi-decade highs, a Fed that’s proclaimed it’s willing to compromise the current economic expansion to fight that inflation, and the heart of the world’s supply chain — China — is battling another wave of Covid-19 lockdowns.

Spooky times, absolutely. But even during spooky times, you can make great money in the stock market.

And right now, regardless of all that macroeconomic noise, you have an opportunity to make big money in EV stocks.

We also recommend