They might also already know that Tesla soared 592%, and that its Chinese counterparts NIO, Xpeng, and Li Automobile soared 1411%, 105%, and 106% respectively.
But what most people may not yet know is that there's another opportunity emerging in EV markets. Mentioned in today's commentary includes Fisker (NYSE FSR), Electra Meccanica Vehicles Corp (NASDAQ SOLO), Li Automotive (NASDAQ LI), XPeng Motors (NYSE XPEV), Tesla (NASDAQ TSLA).
Some of the biggest opportunities in the exploding EV space aren't to be found only in stocks of EV makers, instead, they could be made in companies that are setting up the entire ecosystem that supports the entire industry.
Electric vehicles have slowly become more popular during the last decade, but so far, it's always been a bit of a chicken and the egg story. After all, who wants to buy a swanky electric vehicle if there are no charging points, no dealer network, no fleet services, and no financing options? Behind the scenes, venture capitalists, ESG investment funds, and private equity investors have kickstarted a trend to revolutionize electric transportation not for the happy few, but for the masses.
Morgan Stanley's Adam Jonas recently noted that the real money in the EV business isn't made in the production of electric cars, instead, it's all about tech, software, and services.
Commenting on Tesla's latest price explosion, Jonas notes that, Tesla is on the verge of a profound model shift from selling cars to generating high margin, recurring software, and services revenue ... To only value Tesla on car sales alone ignores the multiple businesses embedded within the company.
But Tesla isn't the only company trying to break into this huge new tech and services market, other companies such as Canadian tech unicorn Facedrive (FD.V; FDVRF.QX) are jumping into the gap, offering smart solutions to bring electric vehicles to the masses.
Facedrive, which started out as a ride-hailing company in the booming Canadian market has recently acquired D.C. based Steer from America's energy giant Exelon, in a deal that included a $2-million strategic investment by energy giant Exelon's wholly-owned subsidiary, Exelorate Enterprises, LLC.
Steer intends to revolutionize transportation by letting people get into EVs without breaking the bank, possibly upending conventional car ownership in the process. With this strategic move, Facedrive (FD.V; FDVRF.QX) became one of the first players in the world to offer a three-tier subscription service in which users can choose from a list of up to 17 electric and hybrid vehicles.
Signing up is easy, and upfront costs are kept low, giving new customers a chance to drive a number of different vehicles without having to commit to one car, and unlike with lease contracts or rental contracts, Steer doesn't have a mileage limit. Better yet, Steer's subscription business has already proven that it lowers the bar for new EV drivers. 70% of Steer's subscriber base are people that have never driven an EV before, and anyone who couldn't afford to ride an EV before, can now.
Next to Facedrive (FD.V; FDVRF.QX), Chinese carmaker NIO is vying for a part of the EV services market, introducing a completely new concept Battery as a Service. With this concept, NIO is looking to gain an edge over rivals such as Tesla by lowering the upfront purchase cost of its vehicles.
With the battery-as-a-service model, customers can buy just the vehicle shell outright, while agreeing to pay rental fees for the battery. NIO's new venture handles the leasing, maintenance, charging, and upgrades of batteries for its customers, effectively taking away doubts about battery life, vehicle reliability, and resale value of the car. Customers can also opt to replace the battery with a newer, improved one in the same car shell as energy storage technology advances rapidly. NIO's BaaS concept could lower the base price of the new vehicle by more than $10,000, and could significantly expand its pool of customers in both China and abroad.
As the EV boom continues to gain traction, research shows that many car buyers remain hesitant to fork out $50,000+ on a new electric vehicle, citing doubts about battery life, limited range, and resale value of the vehicle. The few smart companies out there that could solve these issues will be the undoubted winners of the EV boom.
LONDON
By now, most investors have probably already know that electric vehicles were one of the hottest markets, if not the single hottest market in 2020.
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