A Warning About Electric Vehicle Stocks

July 23. 2020. 6 mins read

Easter European cities have had electric trams running through them for decades now. Using electricity to transport large numbers of humans on trains and buses isn’t anything new. What’s changed is that improvements in lithium battery technologies now mean we can economically electrify much smaller vehicles like passenger cars, motorcycles, or scooters.

The most visible advances in electric vehicles are those made by Tesla, a company that dominates the U.S. market with about 60% market share of all electric cars on the road. As Tesla’s shares soar into the stratosphere buoyed by their competitive position in autonomous driving, other stocks that would be considered pure-plays on the electric vehicle theme are also enjoying the benefits. Since there is no “electric vehicle sector classification,” we can group electric vehicle stocks into two broad areas:

  • Major auto manufacturers
  • Companies that only sell electric vehicles (including pre-revenue companies)

The first category represents a large set of companies that all have varying degrees of exposure to

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