With "clean" and renewable energy in demand, more investors are getting a pleasant buzz from electric-vehicle stocks. It's not just EV manufacturers that will benefit from this rising tide; suppliers of essential equipment -- such as batteries, powertrain components and recharging stations -- also have a bright future. Investing in electrified automation is possible through purchase of company shares or through a targeted mutual fund.
You can take part in the electric car business by investing in shares of companies making electric vehicles, their essential parts, or associated businesses. The shares of Tesla Motors, a prominent EV maker, rose from $30 to $180 in the year before September 2013. In order to buy stock, you must set up a brokerage account and fund it with money transferred from your checking account or paid with a check. Once the account is funded, you can get price quotes and buy and sell shares, by using the company's ticker symbol (for example, TSLA).
Major U.S. automakers are building EVs as well, as electric cars are gradually increasing their share of the new-car market. Ford makes the Focus Electric, while Chevrolet, a division of General Motors, makes the Volt. If consumer demand continues to rise, companies with EVs already in production will benefit. Foreign manufacturers have not been slow to take up the challenge of electric vehicles. Nissan and Toyota make EVs as well as hybrids, which draw their power from electric cells as well as traditional gasoline.
Like anything else relying on power from an electric battery, EVs need a regular charge. The demand for charging stations will increase along with the market penetration by electric vehicles. This will benefit the stocks of companies such as General Electric and Siemens, which are the U.S. and European leaders, respectively, in portable electric generation. Schneider Electric makes the EVLink charging station; Ecotality North America, Aerovironment, Coulomb Technologies and Clipper Creek are other companies that make recharging stations.
Mutual funds that invest in renewable energy also could benefit from the EV trend; as a group, these funds returned an average 31.3 percent in the year prior to August 2013. Before sinking your hard-earned money into funds or shares, however, research the business and essential financial information revealed by fund portfolios, as well as company income statements and balance sheets. Financial media and websites will provide basic stats such as a company's earnings-per-share and price-earnings ratio, as well as the dividend yield of the shares.
- Hemera Technologies/AbleStock.com/Getty Images
- Can Individuals Invest in Stocks & Bonds on Their Own?
- Blue Chip vs. Micro Cap
- What Criteria Are Used to Invest in Stock?
- Advantages & Disadvantages of Convertible Debt
- Understanding & Investing in Stocks & Bonds
- How to Get Started with Stock Investments
- Advantages & Disadvantages of Investing in Common Stocks
- How to Hedge Against Falling Stock Prices
- The Difference Between Holding Period Yield and Annual Period Yield
- How to Pick Stocks to Invest in