In a previous Seeking Alpha article, I created a basket of electric vehicle (EV) stocks that I intend to update from time to time. Consider this update number one. First, I will review the performance of the stocks I included in the initial basket, and discuss recent EV-related developments for some of the stocks. Then I will consider potential changes and updates to the portfolio.
As I discussed in the above-referenced article, not every stock in the basket represents a pure EV play. I broke the basket down into core holdings, fringe plays, and speculative holdings.
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|Company Name (Ticker)||5/13/2011 Closing Price||6/01/2011 Closing Price||Change|
|NRG Energy (NRG)||$24.52||$24.31||-0.9%|
|American Electric Power Co (AEP)||$37.58||$38.02||+1.2%|
|Best Buy (BBY)||$32.31||$30.97||-4.2%|
|Kandi Technologies (KNDI)||$1.98||$1.96||-1.0%|
|Green Automotive (OTCQB:GACR)||$0.74||$1.30||+75.7%|
|Alpha Lujo [ALEV.OB]||$0.12||$0.15||+25.0%|
Relevant EV-Related News Since 5/13
- May 19. NRG President & CEO David Crane testified before a Senate committee on Energy and Natural Resources about using widespread EV adoption to lessen dependence on oil.
- May 16. The company kicked off its efforts for an EV charging station network throughout the Dallas metro in the City of McKinney, Texas.
- May 18. BMW will use AeroVironment's EV charging solution for its forthcoming ActiveE EV.
- June 1. AeroVironment will help electrify I-5 from the California state line through Oregon with EV charging stations.
- May 16. Company announces roll out of residential EV charging stations.
- May 23. Earnings release: Revenues up 61% year-over-year, but loss expanded to $6.8 million versus $2.4 million for the same, year-ago quarter. EcoTality attributes much of the revenue increase to work conducted under a contract with the U.S. Department of Energy.
- May 23. Bullish analyst mention.
- May 26. Tesla raises over $200 million; Street reacts positively.
- June 1. Nissan doubles Leaf sales, experiencing strong demand.
- I can confirm that Best Buy continues to talk to startup EV companies about EV "R&D experiments." You can read more about Best Buy's approach to the EV space here.
- May 16. Kandi announces Q12011 results.
- May 24. ZAP announces Q12011 results.
- May 27. Green Automotive announces Q12011 results.
Taken together, much of the EV-related action among these companies points to a synchronicity brewing in the industry. Toyota (TM) has sold around one million Priuses in the U.S. Ten years from now we'll be saying the same thing about an EV; chalk me up for a prediction of about several hundred thousand each of Tesla's Model S and Model X.
Demand for EVs is strong. In fact, as John Voelcker notes, reporting on the above-mentioned Leaf sales for May:
[Chevy (GM) and Nissan] are still delivering demonstration cars to dealers, shaking down production, and otherwise doing what any sane maker does when it launches a new and important vehicle region by region. Especially one that requires more than average education on the part of the buyer.
In other words, it’s a problem of supply, not demand. Got it?
And this strong demand exists minus large EVs offerings from Ford, the other majors, Tesla, and whatever fringe players will make it domestically over the next 6 to 36 months. Couple this with the rapid build out of EV charging stations and government support for EVs, and you have a situation you should be bullish about. Hydrogren received relatively nill help from policymakers, plus the infrastructure to support even a modest fleet of vehicles never had a chance of coming to fruition. These obstacles simply do not exist with EVs.
Of course, on the speculative plays, you're on your own. They make up a tiny fraction of your portfolio on the hopes that one of them will make it through the startup muck and mire.
As far as the other stocks in the portfolio, I am still bullish on most. In a perfect world, I would continue to accumulate all of them, particularly the ones that have pulled back. For instance, Ford and Nissan both present strong values. Outside of EVs, each have an impressive line of fuel-efficient cars, and that is what's driving auto sales right now. With the exception of EcoTality, I have no qualms about adding to a position in any of the EV charging station plays.
My biggest concern involving EcoTality is their reliance on the DOE contract. Consider these excerpts from the company's most recent quarterly report and annual reports:
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To paint a complete picture, it's important to note that EcoTality also receives, and likely will receive other government contracts -- at the local, state, and regional level -- but it still relies significantly on the DOE. That's not an ideal situation. Of the EV charging station plays I list, it's easily the riskiest.
One of the most stable -- and one that's making quite the aggressive EV push -- is AeroVironment. What that company has done in the EV charging space is nothing short of remarkable. Check out this excerpt from its latest quarterly report. (EES stands for Efficient Energy Systems).
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At this point, I have no stocks to add to the EV basket, but I think that might change with my next update.
Disclosure: I am long TSLA and EVCA.OB, and may initiate a long position in F, AVAV over the next 72 hours.