In today’s Smart Money, I’ll take a look at why I still like this company as an EV play today…
Hello, Reader.
A once-mighty Titan has fallen.
No, not one of the pre-Olympian gods defeated by Zeus and his friends during the “Titanomachy”…
Nor the monster “Kraken” from the 1981 film Clash of the Titans…
It’s Apple’s electric vehicle aspiration, Project Titan.
Through Project Titan, Apple Inc. (AAPL) sought to create an electric vehicle with AI-equipped features and self-driving capabilities. While rumors abounded, the company kept the details well-hidden since the project launched in 2014.
Development picked up in 2018, but then finally ran into wall last week.
Like the builders of the Titanic, Apple probably tempted fate by naming its EV project after an immortal deity. Project Titan perished after just ten years.
Apple, itself, may be a true titan, but not a miracle-worker. The EV industry is claiming many victims these days. Earnings and revenue are declining at Tesla Inc. (TSLA), and the share prices of former EV hopefuls like Nikola Corp. (NKLA), Canoo Inc. (GOEV), and Rivian Automotive Inc. (RIVN) are sliding into a ditch.
Suffice to say, it’s becoming more and more difficult to find quality EV opportunities. Electric vehicles remain an unstoppable trend, however, and continue to provide investment opportunities.
That’s why I’m sticking with my top pick in the EV space.
In today’s Smart Money, I’ll take a look at why I still like this company as an EV play today…
And at another EV-themed investment that may have even greater profit potential…
From E-Audis to E-Porsches
The company – Volkswagen AG (VWAGY) – makes no secret of its ambition to become the world’s preeminent EV company… and it is making rapid progress toward that goal.
The ID.4 SUV, VW’s first-ever U.S.-made battery electric vehicle (BEV), was the first fruit of the legendary German automaker’s ambitious expansion plans in the U.S. market. The company expects 55% of U.S. sales to be fully electric by 2030.
Over the next five years, Volkswagen plans to invest a hefty $76 billion in global EV production and battery technology, including $7 billion to expand U.S. production and $17 billion to expand its market-leading presence in China.
No other major automaker – no less the likes of Nikola or Rivian – is spending close to that amount. Volkswagen is also investing heavily to develop an open fast-charging network worldwide. By 2025, the company and its partners expect to install 45,000 High Power Charging points in Europe, China, and the United States.
Last year, the Volkswagen Group, which includes Audi, Porsche and a few other brands, sold a record 771,000 BEVs last year – 35% more than it sold in 2022. That figure represented just 8.3% of its total car sales. So, plenty of room for growth remains.
Looking further down the road, Volkswagen believes software-based services will generate one-third of revenues in the global mobility market by 2030. For this reason, it is developing proprietary software expertise.
As the company explains…
Over the coming years, the Group’s own software and technology company CARIAD will develop the new E3 2.0 software platform for all Group vehicles and thus exploit synergy effects across all the brands… The new software architecture enables a complete ecosystem, which will offer customers a host of software-based services throughout the full product life cycle. By 2030, the Volkswagen Group will put up to 40 million of its cars based on the new software stack on the streets of this world. The Group will have the largest amount of real-time data in the whole industry – and continuously improve its products on this basis.
Volkswagen’s grand BEV ambitions are not merely an attempt to transition successfully to the next phase of human mobility. They are also an attempt to establish a new phase of robust profitability for the company.
From Oil Pumping to Lithium Mining
Volkswagen is also heartily investing in battery technology to gain an advantage over its rivals.
In July 2022, the company created PowerCo, a 100%-owned subsidiary, to produce battery components in European factories. The company’s aim is to manage the entire process, “From processing raw materials to developing a unified Volkswagen battery to managing the European gigafactories.”
Lithium is, of course, one of the main raw materials that lithium-ion EV batteries require.
This is why a recent discovery in Nevada –an ancient supervolcano holding a vast quantity of lithium – could become a vital cog in the global EV supply chain.
Early reports suggest that the rich sediment from the supervolcano’s eruption millions of years ago could hold enough lithium to last 100 years at current projections… and enough to potentially be worth $1 trillion, an opportunity that could produce a major investment opportunity.
Click here to find out the company that is set to profit from this discovery.
Regards,
Eric Fry
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