Electric Cars: Are They Worth the Investment?

Electric Cars: Are They Worth the Investment? 

Social media can uncover golden nuggets of information for the astute investor. I use social media to spot false narratives it’s pushing in an attempt to move culture and the offshoot products they want to pedal. Their targets are commonly referred to in the investment world as “the crowd” or, the less flattering, “dumb money.” These are ordinary people who tend to be low information and highly emotional consumers. 

One of the narratives being pushed ad nauseam for the past decade is the Green New Deal. The Save the Planet narrative uses wonderful-sounding, vague catchwords and phrases such as renewable, clean, alternative, eco-friendly, and (my all-time favorite) recycle. 

We’ve heard recycling saves the planet, and who can argue with that? For years, just like a good soldier, I separated all my plastic and proudly paid an environmental fee to my waste management company to recycle my waste. I wanted to be a team player and do what I could for the environment. 

Until I discovered under 6 percent of the recycling I diligently place in my recycling bin every Monday is recycled. 

Electric cars trending on social media

One of my favorite false narratives on social media over the past five years is the electric vehicle. Have you purchased your electric car yet? No? Why not? All the cool kids are buying one. 

When you look at social media, you might think electric cars far outnumber my old gas guzzler. So-called ‘studies’ have concluded that by 2030, there will be no more gasoline-powered vehicles. Electric vehicle manufacturers are reporting sales increases of 400% year over year. Holy cow, where have I been, and why am I not buying up all the Tesla stock I can get my hands on? Or Rivian, or Geo, or Fisker, or Volkswagen?

Why I choose not to buy electric vehicle stock right now

Despite electric cars dominating headlines on social media, they aren’t as hot as we thought. These are some facts:

  • Though electric vehicle sales are consistently growing, only around 1 percent of the 250 million cars, SUVs, and light-duty trucks on American roads are fully electric, and that percentage is only slowly increasing.
  • Despite government subsidies, sticker prices for electric cars are very high and out of reach for many Americans.
  • Dealerships are having trouble selling their existing electric vehicle inventory. Many are declining new deliveries because they can’t sell what they have on their lots. 
  • Several manufacturers are cutting back production due to poor sales.
  • Electric car owners report big troubles recharging their vehicles.
  • Electric car owners are also complaining that repairs and maintenance costs are shocking.

In a recent poll conducted by Yahoo Finance, over half of respondents said they are not likely to choose an electric vehicle when they purchase their next car. High purchase and maintenance costs, limited driving range, and insufficient charging infrastructure are the leading reasons.

Over half of electric car owners are returning to gas-powered or hybrid vehicles for their next purchase. If it weren’t for Tesla, that number would be above 70%.

Several electric vehicle manufacturers are burning cash, going bankrupt, or going out of business altogether, like Lordstrom Motors. 

But here’s where the rubber meets the road. According to Autolist, in 2023, only 38% of respondents said electric cars are better for the environment than gas vehicles. That’s down 8% from last year and dropping. 

I could keep going, but you get the picture. What this tells me is that people are slowly catching on to social media’s electric vehicle propaganda campaign. Are electric cars going away? No. But all the spin and hype surrounding these vehicles is drowned out by truth. 

I will continue to monitor electric vehicle stock options

I am closely monitoring Tesla, Ford, and GM, trading them as they report their sales and profits as they attempt to navigate their way through an evolving automotive manufacturing industry and the electric vehicle problems they are facing. 

Feel free to reach out to me to receive more specific insight into how I plan to trade in this space, along with any other individual stocks and ETFs. 

The views expressed represent the opinion of Good Life Asset Strategies, LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.