Investing in the Electric Car Boom

This week has seen some great media responses to the president's State of the Union challenge to get a million electric vehicles (EVs) on American roads by 2015, and we're excited to see fresh momentum behind this aspect of the green Next Economy. Can we reach Obama's goal of one million electric cars by 2015? Yep.

But there are skeptics. Wired has a good piece up correctly pointing out that a million is a huge percentage increase considering "exactly two automakers sell mass-market EVs at the moment. General Motors sold 326 Chevrolet Volts last month, while Nissan sold 87 Leafs. (Yes, the plural is Leafs, says Nissan.)" To that I will add the approximately 1,000 Tesla Roadsters that have been sold in the U.S., but the ballpark 1,500 total hardly registers on the way to a million, and is immaterial next to the "roughly 251 million vehicles on the road in the United States." The article presents a good list of pros (government incentives, peak oil) and cons (auto industry group says we probably can't get there, untested market), and ends by concluding, "w]hether they’ll meet the needs of one million consumers within four years remains to be seen, and will depend upon how hard the government, the auto industry and the public are willing to work to make it happen."  I'll take my conclusion right from the article's URL (if not quite the title), "One Million EVs Is Difficult But Doable and Necessary."

The DOE’s official report on the president’s goal, also out this week, is more optimistic (it fuels a lot of Wired's 'pros' list), figuring there'll be 1.2 million EVs on the road by Obama's deadline. DOE based its projection on car makers' own estimates of how many units they expect to deliver into the U.S. market by that date, and added that the 1.6 million hybrids that hit American roads in the past six years is a good sign about U.S. consumer capacity.  Looking over DOE's list, my view is that some manufacturers are being very optimistic, but others (including some that I know have EV plans) aren’t represented at all. So I believe there's a good chance their figure will come out in the car wash. 

As a result, our previously cited pure plays like Tesla Motors (currently a Green Alpha holding) and BYD (not currently held by Green Alpha), and to a lesser extent the mainstream car companies (none held by Green Alpha) that are rolling out EVs all stand to have a good few years. And their upstream widget makers will benefit too; companies such as A123 (a Green Alpha holding) for batteries and UQM Technologies (not currently held by Green Alpha) for electric motors. 

So, yes, we think there will be at least a million EVs on the road by 2015. We think that the trend will only accelerate from there, and we think a lot of companies along the EV value chain will do very well, too.  And we're not especially concerned about what any oil executive might say to the contrary -- because, in the end, it's not like we have the option to "abandon Earth."

Garvin Jabusch is the cofounder of Green Alpha Advisors, LLC and manages The Sierra Club Green Alpha Portfolio -- a unique blend of Green Alpha Advisors' Next Economy universe and the Sierra Club's proprietary green-investment guidelines.

Comments

[Sally M. Chetwynd]

I noticed the wind farm in the background of your blog photo. I saw a number of these during a cross-country road trip in 2004. I'm pro-environment (although not rabid), interested in practical solutions that appeal to human nature.

Many who preach the development of wind energy out of one side of their mouths scream "NIMBY" out of the other side of their mouths when a wind farm is proposed in their neighborhoods. I found the wind farms that I saw in the mid-West curious and interesting, not a visual blight. Who says that all landscapes must be all natural? If we choose to be offended by the sight, we will be offended. We can choose not to be offended by the sight of wind turbines. This choice is the first step to acceptance. Over the past few decades, we have taught our citizenry to reject the development of anything which isn't pristine in the sense of the natural world. We need to teach them now that man-made structures can be seen as beautiful; if not beautiful, then perhaps more neutral, not necessarily a blight.

[Laurence Modithre]

Cool! Electric cars are really helpful to the environment and also to people. They can save more while contributing a positive effect to the condition of the Earth. I think if every country does this, nature wouldn't be affected negatively in the long run.

[moncler coats]

I thank thee that I am none of the wheels of power but I am one with the living creatures that are crushed by it.

[Romain]

Dear vinavu, I humlby request you, not to publish the low -cheap -comments made by the agents of Indian pimps. It is very disturbing to see the comments made by some persons because their words are ugly and not fit to publish. The women of Assam and Kashmir are our sisters and mothers . If we cannot support them atleast we should not speak against them. They are in love with people like Spectrum Rajas,Chavans,Yeddis,and they will even love and make love with their own ..sorry i do not want to go beyond this.regards,K RaghavanChennai