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Electric Vehicles:  This Is The Start Of Something Big


The Dynamic Wealth Report
June 10, 2011

by Justin Bennett, Editor

I’m sure you’ve heard of electric vehicles (EVs) by now…

You know, the cars many refer to as “glorified golf carts”.  Ask around and you’ll find most drivers think EVs are short on power and long on frustration.  They assume the “juice” just won’t be there when they need it most.

No doubt about it, EVs are widely misunderstood.

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And as much as some drivers love to hate EVs, they’re going to be a big part of our transportation system in the very near future.

Why?

I’ve been researching global oil markets, energy trends, and energy investments for a long time.  And I (along with a lot of other energy analysts) have come to a startling conclusion.

The days of cheap oil are coming to an end…

And it’s happening faster than you think.  The global oil supply/demand balance is getting more out of whack every day.  Emerging economies are guzzling more oil and it’s putting ever-increasing pressure on global supplies.

Of course, that means our “pain at the pump” is only going to get worse. Don’t be surprised if you’re paying $5 (or more) for a gallon of gas in coming years.

Even the auto industry is admitting it’s time for a change…

The world needs a better way to get from point A to point B.  Our transportation system is antiquated and due for a major overhaul.  And like it or not, EVs are the perfect solution for most drivers.

Think the idea is far-fetched?

According to numerous studies, 95% of people drive less than 100 miles a day.  That means EVs can easily take most drivers where they need to go on a day-to-day basis.

Companies like Tesla Motors (TSLA) are already turning the idea into reality…

Tesla builds electric cars that run solely on battery power.  The Silicon Valley start-up is in its early stages, but they’re already producing a high-powered electric sports car called the Roadster.

And you won’t mistake this sleek car for a “glorified golf cart”… the Roadster goes from 0-60 mph in under 4 seconds.  Acceleration like that will leave a gas powered Corvette in the dust!

But more importantly, the Roadster goes 245 miles on a single charge. That’s plenty of range for most people's daily excursions… and even a nice road trip!

With a special charging unit, the Roadster’s batteries are “fueled up” in your garage overnight.  And for those longer drives, you can charge up with a plain ol’ wall socket at your overnight stay.

But let’s be honest, the small two-seat Roadster isn’t exactly practical for the average driver.  I don’t know about you, but I need a little more room.

That’s why Tesla is developing the Model S…

The Model S is a stunning four-door sedan.  According to their website, the Model S is Tesla’s entry into the premium, mid-sized sport sedan market.  It’s competition for the likes of the BMW 5 Series.

But obviously, Tesla has a huge advantage.

The Model S doesn’t burn a drop of gas.  Tesla says the Model S will save you $8,000 in fuel (at current prices) over a 5-year span.  Drive it longer and you’ll save even more.

Tesla’s cars are already a big hit with upscale drivers who are kicking their oil habit.  Obviously, these drivers can pony up the extra dough for a premium electric car.

But what about the average driver?  How can they get around town without burning a drop of gas?

Enter the Nissan Leaf

While not quite as sexy as Tesla’s offerings, the Nissan Leaf is a game changer for the automobile industry.  With a 100-mile range, the Leaf gives you a gas-free commute in just about any urban environment.

It’s a practical solution for those who want a fully electric “around town” car.

What does it cost?

The MSRP is just over $25,000 (after a tax credit), which is still a bit higher than traditional cars of similar size.  But remember, the Leaf gets the equivalent of over 100 mpg.

Drive the Leaf long enough and you’ll easily recover the extra purchase cost in fuel savings.

But here’s where it gets really interesting…

Manufacturers across the auto industry are getting in the EV game.

Chevy, Ford, Volkswagen, Smart, Volvo, Porsche, Honda, Mitsubishi, Subaru, Chrysler, Fisker, Audi… they all have electric models hitting showroom floors in the near future.

And once the EV market gets more competitive, costs will start coming down.  In fact, analysts estimate over 3 million EVs will be on our roads by 2015.

That’s an industry growth rate of over 100% a year!

Is there a way to invest in the next generation of transportation?

You bet… the EV rollout is just getting started.

Well-positioned investors can make a fortune if they play their cards right.  EV manufacturers, battery makers, and charging infrastructure developers are just a few of the different ways to invest.

In fact, subscribers to The Energy Investor just got the scoop on a hot EV charging infrastructure stock.  The stock is still below our buy-up-to price, but I don’t think it will hang around there much longer.  Click here to get the details…

Notable Rating Changes

•  Canaccord Genuity upgraded Cabot Oil & Gas (COG) this week.  They have a buy rating with an $85 price target on the stock.  High oil prices, along with the company’s exposure to the US shale industry, put them in a great position.

•  Verizon (VZ) was upgraded to outperform with a $42 price target by Oppenheimer.  The wireless communications stock is showing an attractive entry point and pays a solid 5% dividend.

•  Stifel Nicolaus downgraded Sprint Nextel (S) to sell with a $4.50 price target.  They must not think the company can compete with the likes of AT&T and Verizon… I would have to agree.

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Issue Date:
 Friday, June 10, 2011


Notable Highs and Lows

•  Accelr8 Technology (AXK) closed at a new 52-week high of $7.17.  The medical diagnostics company has a new test for drug-resistant staph.  Their market cap is now over $77 million.

•  Moody’s (MCO) closed at a new 52-week high of $41.75.  The company provides credit ratings and related research data.  They have a market cap of just over $9.5 billion.

•  Yuhe International (YUII) closed at new 52-week low of $3.87.  The Chinese chicken producer is falling even though they reported strong Q1 earnings.  Their market cap is now under $79 million.


Quote of the Day

"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do.  So throw off the bowlines.  Sail away from the safe harbor.  Catch the trade winds in your sails.  Explore. Dream.  Discover."

                            -
Mark Twain

 
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This Week's Winners

Company Gain
Coffee Holding Co. (JVA) 71%
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Catalyst Pharma (CPRX) 56%
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*Week-to-Date, Stock Price > $5


This Week's Losers


Company Loss
Brazilian Telecom. (TBH) 50%
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