Don’t Believe the Hype. Electric Cars Are Here to Stay

Anti-EV zealots had reason to cheer last week.

After embracing EVs for its rental fleet, Hertz (NASDAQ: HZ) got dinged when high repair costs, lower resale values (after Uncle Elon dropped the price of its Model Ys and Model 3s), and muted interest from customers unltimately made this a bad decision.

While I understand wanting to integrate more EVs into its fleet, Hertz placed too big of an order.  20,000 was way too much.

Truth is, there’s been no evidence to suggest that a majority of rental customers are seeking EVs anyway.

I’d also be interested to know how many customers wrecked those rented Teslas.  Because the latest data indicate that drivers switching from internal combustion to EVs are more likely to get into accidents within the first year of ownership compared to drivers switching from one internal combustion vehicle to another.  

This doesn’t surprise me though, as the acceleration on an EV is vastly different from that of an internal combustion vehicle.

With internal combustion, the speed of your vehicle sort of ramps up over a few seconds, while EVs take off like a bat out of hell the second you step on that accelerator.  If you’ve never driven an EV before and you’re not prepared for that instant torque, an accident is certainly likely. It’s unfortunate, because costs to repair EVs tend to be a bit higher than what you might find with internal combustion. 

Those repair costs will go down after time after more EVs are on the road, supply channels expand, and materials costs decline.  But in the near-term, you’ll be hard-pressed to find many Teslas in rental car fleets this year.

In fact, last week we got word that European rental car company Sixt was also dropping the Teslas it has in its fleet, and has put in an order with Stellantis (NYSE: STLA) for as many as 250,000 vehicles.  

This is not trivial. 

But it’s also not a complete repudiation of electric cars.

According to Bloomberg, the multibillion-euro order includes both internal combustion vehicles and EVs.  It should also be noted that, while it doesn’t really advertise itself as such, Stellantis is one of the biggest players in the EV space.

Not only is the company aiming for 100% of European sales to be electric by 2030 (and about 50% in the U.S.), it’s also commandeered enough supplies of EV battery materials to take it through 2027. 

In other words, while Stellantis is not an EV-only car company, it’s strategically moving in a direction where the majority of its vehicles will eventually be electric.  

Also worth noting: a couple of weeks ago, Stellantis announced a new investment in a sodium-ion battery startup called Tiamat.  Tiamat claims that its batteries can be recharged in as little as 5 minutes. 

To put that into perspective, the quickest you can charge a car today — from a fast-charger — is about 30 to 40 minutes. 

If this holds true, Stellantis could prove to be one of the most successful EV companies in the world — and it’s not even an EV company. 

But this isn’t really just about Stellantis.  It’s about the EV market, in general.

We know EV sales slowed last year, mostly due to high interest rates and supply chain disruptions.  And we also know that this time of year, when the proverbial mercury falls below 32 degrees Fahrenheit, EVs aren’t as efficient as they are in the warmer months.  When this happens, those who loathe the idea of a battery moving a car warn the world on social media that EVs are a scam.  

They’ll say they don’t work. 

They’ll say If you drive one in the snow, you’ll run out of charge and freeze to death.  

They’ll tell you that if the grid goes down, you won’t be able to drive your pregnant wife to the hospital and she’ll have to deliver the baby in a blizzard.  Or whatever other hyperbolic scenario they can come up with.

While EVs still have some downsides, they’re not as catastrophic as some folks want you to believe.  And whether they like it or not, the EV market will continue to grow rapidly for the foreseeable future. 

I don’t say this just because I love my Tesla and have long been a fan of electric cars, by the way.

I say this because, as investors, you have to make investment decisions based on data and objective analysis.  You can find that here every single day.  

The type of analysis that eschews conjecture while focusing on facts.  Because that, dear reader, is what will help you create wealth.

And let’s face it: we’re just here to make money anyway.

In fact, while I’m easily the biggest treehugger here at Energy & Capital, I’m also not stupid enough to ignore an opportunity to make a ton of money in what some would consider the antithesis of EVs: the oil & gas industry. 

I bring this up because, according to Keith Kohl, one of the most successful oil & gas analysts in the world, we’re about to enter into another 10-year bull market in oil.  Just like the one we witnessed 20 years ago. 

The same triggers that not only pushed oil prices to new highs but kept them there for nearly a decade, have returned.  And as a result, Keith now expects oil prices to creep back up over $100 a barrel again, and actually stay there for years.  

Since Keith has already helped me make boatloads of cash in the past, I’m most definitely listening to him about this.  You should, too.  Which is why I’m including this link to his most recent investment note that explains why he’s so bullish on oil right now, and more importantly the stocks he believes will give you the most bang for your buck as oil climbs back to $100 a barrel.

Make no mistake: I don’t care if it’s zero-emission electric cars or carbon spewing gas-powered cars, if there’s a way to make a buck, you better believe we’re going to be all over it.  

So unless you hate money, I encourage you to get some of this action for yourself, too.

To a new way of life and a new generation of wealth…

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.