Electric Vehicle Profits

The Next Round Of Electric Vehicle Profits

Written by Brian Hicks
Posted July 28, 2009

Last month I wrote a blog piece about an electric car manufacturer called Coda Automotive. This is the company that plans to introduce a full-performance, all-electric sedan to the California market in 2010.

After writing the piece, I received a few e-mails from folks who wanted to know why I would write about a company that is not publicly-traded.

The reason is simple: Any company operating in the alternative energy space — public or private — is relevant to our overall analysis of the market.

From publicly-traded solar companies that beat earnings (which happened to SunPower [NASDAQ:SPWRA] last week, and catapulted the stock 30% in just one day), to small electric car start-ups like Coda — they're all relevant when it comes to investing in alternative energy.

To give you an example of what I'm talking about, yesterday morning, Coda Automotive announced that it would be using electric propulsion systems manufactured by UQM Technologies (AMEX:UQM). While Coda is not publicly-traded, UQM is. And following yesterday's announcement, UQM soared 27 percent.

Now we've written about UQM in the past, as its technology has been utilized for other electric vehicle manufacturers that are also not publicly-traded. Most recently would be Investing in Electric Vehicle Companies that highlighted a company called Electrorides, which manufacturers all-electric Class 4 delivery trucks. Incidentally, the city of Santa Monica purchased the first Electrorides truck (the Zero Truck) last month.

Point is, just because some of these companies are not publicly-traded, doesn't mean there aren't or won't be opportunities stemming from these companies in the future — either directly or indirectly.


Take high-performance battery manufacturer, A123 Systems, for instance. Here's a company that wasn't public when we first started writing about it. But last summer, as we reported here, the company filed for an IPO.

And since the start of this year, the company has been quite active. Take a look. . .

  • January 7, 2009 - A123 Systems announces plans to build a lithium-ion battery manufacturing facility in the U.S.

  • April 2, 2009 - A123 Systems announces it will supply lithium ion cells for Shanghai Automotive Hybrid Vehicles

  • April 6, 2009 - A123 Systems signs an agreement with Chrysler to supply the company with advanced lithium ion battery cells, and to jointly develop battery modules and packs for Chrysler's new electric vehicles

  • April 13, 2009 - GE increases it's cumulative investment in A123 Systems to $70 million

  • April 14, 2009 - The state of Michigan ponies up more than $100 million in refundable tax credits for A123 to establish the company's manufacturing hub in the state

Now the company's IPO has been held back, primarily due to market conditions. In fact, just last month we saw that A123 amended its registration statement yet again. But based on recent interviews and meetings, we have little doubt that A123 Systems will soon be a publicly-traded company.

The Future of Cars to Come

While there are still some stragglers who won't accept the fact that the future of personal transportation will overwhelmingly be electric, the major auto manufacturers are moving forward with their introductory electric offerings. It's one of the main reasons half these high performance battery and electric motor companies even exist in today's shaky economic environment.

The fact is, every major automaker now has an electric vehicle in the works  some with their first round scheduled to hit the market next year: GM, Ford, Toyota, Subaru, Mitsubishi, Chrysler, Nissan — they're all embracing the future. . . instead of falling victim to it.

Many analysts are also sharing in our enthusiasm these days. Most recently, an analyst from Credit Suisse who said:

"We believe the electrification of the car appears increasingly inevitable, with plug-in hybrids providing the bridge technology to full electric vehicles."

We couldn't agree more. And we will continue to bring you the latest in electric vehicle development to ensure that you have every opportunity to profit from this burgeoning market.

To a new way of life, and a new generation of wealth. . .

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P.S. Toyota just announced that it now plans to launch a hybrid compact in 2011. The vehicle will use the same platform as the Yaris, and is expected to debut for $15,760.