Overvalued electric vehicle manufacturers run rampant in the EV industry. Take a look below to see why you should be ignoring the hype and focus on one proven winner.
The bubble grows larger and larger
In the past year, Tesla stock has increased roughly 600%, resulting in the market capitalization of almost $540 billion. That’s 35 times the book value and roughly 20 times higher than it’s annual sales. NIO, a Chinese EV manufacturer, is now worth over $70 billion, even though they’ve only delivered 12,000 vehicles in the third quarter. Despite accusations of fraud and having absolutely no revenue, Nikola is still worth over $10 billion. With a production target of only 1,800 vehicles in 2021 and minimal revenue, Workhorse is still worth over $3 billion.
There is the possibility that these EV startups will radically break through the capital intensive and cut throat competitive nature of the automobile industry, but it’s highly unlikely.
Keep your eyes on this one EV stock instead
If you’re considering investing in electric vehicles, take a good hard look at General Motors. In the next five years, GM will be funneling $27 billion into electric vehicles and autonomous vehicles. By 2025, they plan on having EV models for all of their major brands; Cadillac, GMC, Chevrolet, and Buick.
How do they plan on doing this? Their Ultium battery technology. When measured up to the Chevy Bolt EV, which launched a few years ago, the Ultium battery is roughly 40% cheaper. By mid-decade, they are expecting these new battery packs will double the energy density compared to traditional batteries.
In addition to that, GM is already light years ahead of the game when it comes to driver assistance systems. Consumer Reports concluded in October that GM’s super cruise system was the best in a test of 17 systems.
While other EV manufacturers may continue to struggle, General Motors is actually profitable right now.
If you want to gamble, pour your money into the bubble of EV stocks that have been praised by news outlets all year long. If you want to actually invest, scoop up some GM stock.