How to identify Electric Cars Stock to make a maximum profit?

How to identify Electric Cars Stock where you can make a maximum profit?

Electric cars stock would be the next bet to invest in companies that are directly or indirectly associated with the manufacturing of electric cars or other accessories of it.

There is one simple formula to identify which companies’ stock would grow in the future of any sector like electric cars.

That simple formula is to start to see what new things are happening around me…What new things I am observing? What new things I am listening to? What new things I am watching?

When we will deeply analyze all things then start to find the companies whose stock is associated with these new things.

Then see, which companies are listed in your country in which you can invest.

Suppose you start to see more electric cars Subaru on the road or electric cars Volvo, then it means the stock of such companies would grow in the coming days.

Here, I am just giving you an idea of how to identify electric cars stock in a simple way.

In the end of this blog, you will have enough clarity for identifying the electric cars stock to make maximum profit.

As we know the demand of electric cars start to grow across the globe. Because the next-generation transportation is electric vehicles.

So for electric cars the four major things required

1. Electric Cars Making Companies
2. Electric Battery-Making Companies
3. Battery Recharging Stations Companies
4. Technology provider companies

Electric Cars Making Companies

 

 

Electric cars making companies that would have the upper hand in this space would lead in the market.

Certified Staff

The first concern comes to mind of a car buyer is, if he/she owns it then what would be the after-market service facility available? Whether companies have enough certified staff to do the maintenance of their car.

As there is huge expertise required to attend the fault of the electric car.

Driving Range

The second concern of electric car buyers is what would be the driving range. Whether they would be able to go outside for an exciting tour and come back home without any hassle.

The companies which would offer the largest driving range would have the upper hand over other companies.

Tesla provides the largest driving range currently but in the future other companies may have the upper hand. You also have seen in from a few years back how Tesla stock outperformed.

Under budgeted price of electric cars

The third point where buyers are more concerned is the under budget price of an electric car.

If the cost of the car is so high that gasoline cars appear a more convincing bet, then why anyone would go for the electric car until there are some sort of federal laws enforced on public.

Affordability is also a big factor and the companies which can convince this desire can lead in the market.

Genuine Spare Parts

The fourth factor is genuine spare parts availability so that in the event that any part has to change then it should be available at an affordable price.

So electric car-making companies should have enough networks to serve their buyers.

If any company provide such facilities to their customer, then why not such companies would grow and why would not their stocks make a profit?

So, identify such companies and start your investing journey.

The next turn of Electric Battery making companies and companies behind to provide the raw material to make electric batteries.

Electric Battery-Making Companies

 

 

Here we will divide our discussion into two parts.

The first part includes the car components which are available in non-electric cars also.

For example, the tires of cars would remain the same in electric and non-electric cars.

The outer body would also remain the same to a large extent. So, companies that are providing all this stuff would have limited growth.

The second part includes the component of the car which are not available in non-electric cars.

For example, electric batteries, electric motors, technology, and electric charger (Level-1, Level-2, DCFC) are used in such cars.

Now the companies which are making electric batteries, electric motors, and technology would grow in the future.

Let’s take the example of an electric battery.

If we go one step ahead then we will realize that the electric battery is not a just box but more than it.

So, we have to understand the components of electric batteries so that stocks associated with these components could be understood as well.

Any electric battery made of majorly four components

Cathode

Separator

Electrolytes

Anode

So let’s discuss each one by one.

Cathode

The cathode of material of an electric battery is made of cathode active material which is called NCMA i.e., Nickel, Cobalt, Manganese, and Aluminium.

It accounts for 40% cost of the cathode.

So, think about which companies have the monopoly or largest market share of all these metals.

Hope so you got the idea to identify electric cars stock, but the story is not over here.

We have to again drill down our research to identify profitable companies.

I am not saying here, go straight and switch on the business channel to see electric cars stock and start investing in such stocks.

Instead, you have to do your own study.

The one classic benefit of doing your own study is, that if you made any mistake and bear a loss then you would also be able to realize where you made the mistake and would not repeat same mistake again.

Never pick electric cars stock just by seeing the business channels because the channels only show the stuff which you want to see.

But here is one catch.

As R&D progresses towards affordable & safe electric cars, the material of batteries would also replace with other materials which have a lower cost.

For example, R&D looking for an alternative to Cobalt and they have got some success in it also.

Manganese is being seen as the alternative of Cobalt for safer batteries. So the demand of Manganese will increase.

The companies which process the ores of Manganese, the companies which refine the Manganese, and the companies which deliver Manganese to the electric battery-making companies would also grow.

Here I mean to say you have to focus on the change happening in such areas.

We are living in the era of the Information age. The person who would have the earliest information about anything would make money.

So for such updates, you have to do just one small thing and that one thing is to accept the notification update of this blog.

There one more change will come that change is to replace the lithium-ion battery with an aluminium-ion battery.

To know more you can read my other blog “Can EV batteries be recycled?”

If this change comes in near future, the demand of aluminium will increase.

Separator

The next component of electric batteries is a separator which keeps the cathode and anode apart while allowing the smooth flow of ions through electrolytes.

There is big research going on to make robust separators.

The ceramic-made separators are ahead in the race. Now think about which companies making such separators or dealing with ceramic material.

Electrolytes

The third component is the electrolyte in which the ion flow across the cathode and anode.

There is research going on to make affordable Solid-State Batteries in which the electrolytes would be in solid form instead of liquid form.

This will be the game-changer in the history of electric batteries.

Because the Solid-State Battery would be much more affordable & safer than current-age batteries.

So, start to identify the companies which are making solid-state batteries or doing research on it.

With this insight, you can easily identify the early bird companies in the electric cars stock space category.

Anode

The fourth component of a rechargeable battery is the Anode which is made of graphite powder.

For affordable EV batteries, Pure Silicon going to replace the graphite powder which is much more stable than graphite and easily available.

The companies which deal with silicon manufacturing will enjoy this extra edge over the graphite-making companies.

The list does not end here.

The companies which are making cathode nanotubes (CNT), thermal adhesives, anode binders, and battery assembly solutions are also part of electric cars stock.

You have to identify all such stocks.

 

Battery Recharging Station Companies

 

The companies which are making or doing the installation of Level-1, Level-2, and DC Fast Chargers would grow.

Even the companies behind this which provide electric wire or photocells or any associated material to it have the scope to grow.

As Subaru has business partner EVgo, which has 46000 recharging stations across North America. The Qmerit company, which facilitates in the installation of a Level-2 charger. So, look for such companies.

 

Technology Provider Companies

 

In the same way, you can identify the companies which are doing good in artificial intelligence and machine learning.

As you have seen a few months back when there was a lot of shortage of semiconductors.

Now think, about how much such companies have an extra edge.

Conclusion

In the last if you are nothing understand how to invest in electric cars stock, then just do one thing.

Identify the companies which have a return on equity (ROE) of more than 20%, a return on capital employed (ROCE) of more than 15%, have zero debt, and the last factor is most important.

Once you have started with this bare minimum requirement then you can identify other factors also which influence the profitability of the company.

We have to identify the diamond in the dust and such companies are under our noses.

We just have to remain alert and attentive to changes happening around us to select the best electric cars stock.

You have to catch those traces which come from information around us.

There is huge research going on to make affordable electric batteries from a sustainability point of view.

Here, just give the idea that what type of mindset is required to identify electric cars stock & start your investing journey.

What do you think about, which types of electric cars stock would grow in the future, please comment here.