2017 Electric Car Investment Guide

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2020
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By Jeff Siegel

The car world is obsessed with Tesla (NASDAQ: TSLA)…

And for good reason.

After all, in the world of vehicle design and alternative fuels, no one has taken this disruptive technology further than Elon Musk and Tesla Motors.

The days of glorified golf carts are long gone. And although few can actually afford an $80,000 Model S, Tesla isn’t the only game in town.

In fact, Nissan (OTCBB: NSANY), which makes the all-electric LEAF, recently announced that after four years, its alliance with Renault has officially sold 250,000 electric cars.

That may not sound like much, especially when you compare that to the Ford Fusion, which sold about the same number of cars in a single year in 2014. But in the scheme of things, this is a very big deal.

After all, five years ago, only 17,000 electric cars were sold in the U.S. Nissan’s cut came in at 9,674 units.

Today, the Nissan-Renault alliance has sold a quarter of a million electric cars worldwide.

To put that in perspective, the very first hybrid vehicle to hit the market was the Honda Insight. To date, it hasn’t even broken 100,000 units.

Of course, the real superstar in the world of conventional hybrids is the Toyota Prius.

Folks, it took six years for Toyota to sell 228,000 units of the Prius.

If you combine Honda Insight sales and Toyota Prius sales, it took both manufacturers six years to sell what the Nissan-Renault has sold in electric cars in just four years.

So when we speak about growth, this is what we’re talking about.

In the passenger vehicle space, you will find no greater growth story than the electric car. And that, dear reader, is why smart investors have a keen interest in the electric car trend.

The Front-Runners

In the world of conventional hybrids, it didn’t take long for Toyota to lead the pack with the Prius.

Bottom line: The Prius has always delivered better fuel economy and a better all-around ride than its competitors. Priced competitively, it’s no wonder Toyota continues to run this show

But when it comes to electric cars, the jury’s still out as to which manufacturer will become the mainstay of electrics.

The most common electric cars on the road today are the Tesla Model S, the Chevy Volt, and the Nissan LEAF. But between small production levels of compliance cars and new entries designed to compete with the front-runners, there are now more than a dozen electric vehicles from which to choose.

Which will reign supreme is still anyone’s guess.

However, we do know that a number of these manufacturers are upping the ante in major way for future releases. And the two main sticking points for consumers are range and price.

So let’s take a look at the specs of what’ll soon be hitting the showrooms…

Tesla Model 3

  • All-electric range: 250 miles
  • Retail cost: $35,000 without federal tax incentive/$27,500 with federal tax incentive
  • Launch date: 2017

Chevy Bolt

  • All-electric range: 200 miles
  • Retail cost: $37,500 without federal tax incentive/$30,000 with federal tax incentive
  • Launch date: 2017

Nissan LEAF

  • All-electric range: 250 miles (estimated)
  • Retail cost: $30,000 (est.) without federal tax incentive/$22,500 (est.) with federal tax incentive
  • Launch date: 2017

Both BMW and Audi have new electric offerings coming too, yet specs on these models are still somewhat under wraps.

I’m not sure how many more Fiat 500es will be made either, but Fiat CEO Sergio Marchionne has criticized the vehicle from day one, actually telling customers not to buy it. Apparently it continues to have software problems, too.

This will really never be more than a compliance car, and quite frankly, it’s not even worth considering in terms of the big technological disruptions in the coming years. As far as I know, there are no future plans to offer a better version.

Also not coming soon are newer versions of the Chevy Spark EV  which is actually a cool little car that comes with a pretty decent price tag. Sure, it’ll only give you about 70 miles on a charge, but for a city car or a car that’ll take you to and from work every day, it’s not a bad deal.

Charge times are as little as 20 minutes (for an 80% charge), and with the federal tax credit, you can get one for about $18,500. And if you live in a state that offers its own incentives, you could pay even less.

In Maryland, with both state and federal tax incentives, I could pick one up for about $16,000. Not bad for a car that’ll never need a drop of gasoline, a single oil change, or a pricey emissions test.

Admittedly, it’s not quite as comfortable or as stylish as a Tesla Model S  but for the price, you can’t beat it.

In any event, from an investor’s point of view, the three manufacturers to watch are Tesla, Nissan, and GM (NYSE: GM).

Obviously Tesla is the pure play here. Whether or not you want to take a position in Tesla is really based on how much faith you have in Elon Musk and his ability sell the company’s next-generation Model 3. And don’t forget the energy storage business Musk is running as well.

Certainly I wouldn’t invest in GM or Nissan to get a piece of the electric vehicle market. But continue to watch for new developments in battery chemistries, software designs, and next-generation, lightweight materials that could offer a backdoor way to play the booming electric vehicle market.

Because rest assured, the age of electric transportation is here to stay. And getting a piece of this action today is like getting a piece of Ford (NYSE: F) right before the first Model T rolled off the line.

We’re definitely off to the races, my friend. And electric cars are in the pole position.

To a new way of life and a new generation of wealth…

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Jeff Siegel is Editor of Energy and Capital, where this article was first published.  follow basic@JeffSiegel on Twitter

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