Raymond James Energy Stat of the Week
by J. Marshall Adkins
Energy Stat: Prices Fall, Chargers Proliferate... EVs Finally Going Mainstream
March 3, 2014
If you happened to own Tesla shares over the past year, you would be a happy investor indeed. If you were on the short side… well, our condolences. While Tesla is probably the first company that comes to mind when you think of the electric vehicle (EV) market, EVs are a much broader theme, having long been the quintessential emerging growth story within clean tech. (Worth noting: despite its $30+ billion market cap, Tesla's weighting in clean tech's benchmark ECO index is only 2%.) In today's Stat, we take a comprehensive look at the U.S. EV market. Market adoption of EVs is picking up pace, a function of expanded vehicle choices (alongside, for the most part, declining prices), greater consumer awareness, and the undeniable reality of high fuel prices. At the same time, there remain some hurdles that prevent even faster growth: infrastructure constraints, still relatively high upfront prices, and occasional media-driven hype about recalls and battery fires. All in all, after significant expansion over the past two years, we believe that the domestic EV market will reach penetration of 1% in 2014, a notable milestone on its way to becoming fully mainstream. As this trend continues, opportunities for equity investors are likely to expand over time. In this Stat, we also provide some compare-and-contrast thoughts on EVs and natural gas vehicles, a concurrent growth story.
This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.
There is no assurance any of the trends mentioned will continue in the future. Past performance is not indicative of future results. Investing involves risk and investors may incur a profit or a loss. Specific sector investing can be subject to different and greater risks than more diversified investments. Investing in commodities is generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.
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