Strike Three For EV Stocks
The EV industry is at a historic turning point.
The total EVs getting sold and on the road is accelerating higher.
Yet early leaders in EV production are going to face existential crises.
There are big problems ahead for EVs.
And according to one recent report from the Wall Street Journal, it’s about to get even worse.
How EVs Become A Bad Deal
If you’ve tapped into the impressive features of AI, you know there's an extremely disruptive force there.
Earlier this year we pointed out how Warren Buffett was locking in billions of dollars in profits from one his major EV investments made years ago.
We identified two clear reasons to get out of EV stocks now:
First is the bubble run-up in EV stocks.
EV’s were one of the hottest sectors over the past two years.
These companies had no business being worth trillions when most will lose money for years to come.
The second factor is increased competition
The number of new EV’s rolling out in 2023 is in the dozens.
The big U.S., European, and Asian automakers have many more planned for after that.
The early EV leaders thrived without competition. That’s changing fast.
Those two alone have already sent EV stocks plummeting.
But now there’s a third factor that’s going to - operating expenses.
The Wall Street Journal has reported on what’s happening where Rising Power Prices in Europe Are Making EV Ownership More Expensive.
Look, EV buyers know the upfront costs of driving an EV tend to be high.
But a big part of the deal was the ongoing operating expense, mainly fuel.
Even with elevated gasoline prices, EVs just aren’t delivering the promised savings. Especially in Europe.
The Wall Street Journal points out:
Rocketing electricity prices are increasing the cost of driving electric vehicles in Europe, in some cases making them more expensive to run than gas-powered models—a change that could threaten the continent’s electric transition.
In Germany, Tesla has raised prices at its fast-charging stations several times this year, reaching a peak of 0.71 euros, equivalent to 75 cents, in September before falling somewhat, according to reports from Tesla owners on industry forums. There is no public source to track the prices on Tesla superchargers.
At the pricing peak, drivers of Tesla’s Model 3, the most efficient all-electric vehicle in the Environment Protection Agency’s fuel guide in the midsize-vehicle category, would pay €18.46 at a Tesla supercharger station in Europe for a charge sufficient to drive 100 miles.
Conclusion
This is yet another major drag on EV sales.
Because in addition to the high upfront price, all the “range anxiety,” and accelerated depreciation driven by high cost of battery replacements, you do not get the savings to offset it all.
Without that there’s not many reasons to buy an EV.
And many consumers won’t.
EV stocks were behind in the count with two strikes…
This should be strike three.
