EVs for Everyone

A lot has been said about the car market since the start of the pandemic. 

With prices climbing, owners selling their cars for more than they were worth, and chip shortages constraining supply, the sector is practically unrecognizable from the form it was in just a few short years ago. 

Now, throw on top of that the fact that cars with internal combustion engines are on the way out compared to electric vehicles. 

It was a slow transition at first, but it has been picking up speed in recent months. And that momentum just keeps building. 

EVs for Everyone

Look at a recent report that says electric vehicle supply on dealer lots has outpaced inventory of combustion engine cars. That’s according to a recent report from Cox Automotive. It states that new car inventory for gas cars is at 54 days’ supply while electric cars are at 92.2 days. That’s over 300% from where it was just a year ago. 

There have been plenty of news stories about car companies ramping up their production. The Inflation Reduction Act, increasing consumer demand, and other similar factors all tell the story. But these are somewhat intangible compared to hard numbers shown in this new report. 

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Availability was always one of the big obstacles that EVs needed to overcome. Now it looks like that obstacle is going away. 

Supply issues are easing, and thanks to increased production and better consumer awareness, more buyers are looking to get into EVs. Now that inventory numbers are going up, it’s going to get easier to put buyers in those cars. 

Price, of course, was one of the other big hurdles. 

But as the sector grew and supply increased, prices have come down to a much more acceptable level in the eyes of consumers. Many analysts speculate that EV prices could be on the same level as gas cars in only a few short years. 

This all meshes nicely with a few recent developments in the space. Competition between companies has gotten more intense and the US has recently become the second-biggest EV market in the world behind China. 

Just about every big-name car company under the sun offers or has committed to expanding their EV lineups. They’re also striking deals to make the batteries that allow these cars to run. Ford, GM, and Hyundai are just some of the companies that have been aggressively building out battery manufacturing infrastructure here in the US. 

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Thanks to incentives offered by the Inflation Reduction Act, that kind of activity is only poised to increase as the transition to EVs continues moving along. 

So, along with battery deals and increased vehicle output, you’re going to see growing competition between car companies to secure lithium supply so they can keep building their batteries. 

In many cases, that will look like the deals Ford made with companies like Compass Minerals and Nemaska Lithium. In other cases, it might go as far as a car company buying a lithium miner outright, like Tesla is reportedly considering. 

Either way, lithium is going to be one of the hot commodities for the foreseeable future. That creates a prime opportunity for investors who get into the right plays. 

All of these catalysts are coming together to create the kind of environment that can make fortunes for investors in the right companies.

Ryan Stancil

Ryan Stancil
Editor, Daily Profit Cycle