It looks like the future really might be electric. According to Auto Trader (LSE:AUTO), searches for electric vehicles hit their highest ever levels as fuel shortages made the news. Even a Luddite like me can start to imagine that my next car might be electric, which has got me thinking about how I could invest in electric vehicle stocks.
The electric supercar
My first thought is Aston Martin (LSE: AML), which will produce its first fully electric car by 2025. This is in anticipation of the UK’s 2030 ban on the sale of new non-hybrid petrol and diesel cars. In October 2020, Mercedes took a 20% stake in Aston Martin, and the car maker is hopeful that this partnership will give them the edge over rivals by providing technology and even electric vehicle batteries. That said, I am wary of the risks of investing in a firm at the supercar edge of the market. Going electric might make sense for a city run-around, but will supercar fans be persuaded? I’m not sure if even Aston Martin is convinced – it has committed to keep producing petrol engines for traditionalists even after the UK ban. Ferrari have also pledged to produce an electric supercar by 2025, intensifying competition.
The original electric car
No article on electric vehicle stocks would be complete without a look at Tesla (NASDAQ: TSLA). Its share price has soared from $426 12 months ago to $794 today. If I’m a believer in the electric vehicle revolution, should I add some to my portfolio now? Tesla has certainly been at the cutting edge of electric car innovation. At the time of writing, it looks possible that drivers could be weeks away from unlocking ‘full self-driving mode’ on certain models. But this technology is also under review in the US from the National Highway Transportation Safety Administration, and its share price could be vulnerable to the NHTSA’s findings. There is also the unpredictability of Elon Musk’s tweets, which have wiped billions off the Tesla share price in the past.
The electric car marketplace
Another possibility is Auto Trader, the online car marketplace. Its share price has faltered over the past 12 months, sitting at around the same level as last October (600p). Despite this, I think it could be an interesting long-term bet. Its 2021 annual report listed going electric as the number one strategic priority, and its site now boasts a whole section on electric cars, allowing visitors to ‘discover the future of driving’. However, 90% of cars listed on Auto Trader are still used models: as electric vehicles are still a relatively new phenomenon, second hand models are only trickling onto the site. But as early adopters look to upgrade their models over the next few years, this will change. Auto Trader could prove a good electric vehicle-related stock to hold.
This week’s fuel shortages and motorway-blocking climate protestors suggest to me that electric vehicle stocks are worth a look. But if auto companies don’t move quickly enough, they could get left behind. I’m only looking to invest in the electric vehicles stocks that are moving into high gear.