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Electric Vehicle Play

My #1 Play on Electric Cars

Written by Jeff Siegel
Posted March 26, 2012

It all went down on June 14, 2000...

California suffered its largest planned blackout since World War II.

Two months later, Governor Gray Davis called for an investigation into possible price manipulation in the wholesale electricity marketplace.

That's when Dynegy Inc. was officially accused of price manipulation and other fraudulent practices.

Fast-forward to 2012, a $120 million settlement is finally announced.

And what will the state do with that money?

Going Back to Cali

Twenty million dollars from this settlement will go to fund the reduction of consumer energy bills. That part doesn't concern us — unless, of course, you live in the Golden State.

The other $100 million?

Well, this is where it gets good...

Governor Jerry Brown announced last week the state will use the remaining $100 million to install 200 public fast-charging stations for electric vehicles, as well as 10,000 plug-in units at 1,000 different locations across the Bay Area, San Joaquin Valley, Los Angeles, and San Diego.

There are three ways we can invest in this.

The first is the most obvious: the companies that make the charging stations.

There are five that have a shot at getting some of this action:

  • Coulomb Technologies

  • ECOtality (NASDAQ: ECTY)

  • AeroVironment (NASDAQ: AVAV)

  • General Electric (NYSE: GE)

  • Siemens (NYSE: SI)

Playing the charging angle is tricky, though. Your choices are limited to small, speculative plays or huge corporations that simply have some exposure to this market.

Certainly there's opportunity here. But quite frankly, this isn't where the real money is.

If You Build It, They Will Come

Here's the interesting thing about California's focus on electric cars...

The state expects to have 1.5 million zero-emission vehicles on the road by 2025. Most of these will be electric.

And don't let the loudmouths in Washington or the media dissuade you. This is going to happen.

Of course, if you think I'm off base, that's fine.

But I've spent enough time with lawmakers in California and top execs at the biggest automakers to know this path to 1.5 million is well under way.

Now, we also know that by 2015, all the major cities in California will have adequate infrastructure in place to accommodate these 1.5 zero-emission vehicles.

Last week's announcement just further validates California's commitment.

By the way, this announcement came just days after it was announced that a 160-mile stretch of Interstate 5 is now outfitted with fast-chargers that can charge an electric car in 20 minutes. They're spaced about 25 miles apart all along this Pacific Coast motorway.

My point is this: More than half of the states in this nation are now actively building out an infrastructure to support the integration of electric cars.

You may not be a fan of electric cars... You may think they're inefficient, unattractive, and unable to meet your daily driving needs.

But make no mistake about it; that should have no bearing on whether or not you decide to profit from them.

And this is how you do it...

Miracle Investment

If you're a regular reader of these pages, you know we've long been profiting from the materials that make electric vehicles possible.

We've been doing it with lithium.

We've done it with rare earths.

And now we're doing it again with what my colleague Nick Hodge calls the “miracle material.”

This is actually the most important — and probably the one that'll make you the most money from the rapid integration of electric cars.

You see, the biggest obstacle to electric vehicle adoption is range. Today, the average electric vehicle will only give you a driving range of around 80 to 120 miles per charge — certainly enough to meet the needs of more than 70 percent of the daily commuting population, but definitely not enough to calm range anxiety...

My #1 Play on Electric Cars

The solution to “range anxiety” is two-pronged.

First, you need infrastructure in place that provides fast charging. That is, no more than 20 minutes per charge.

That development of that infrastructure is currently under construction.

The second thing you need is a battery that'll allow your car to travel at least the same distance as the average internal combustion engine vehicle.

Those batteries are now being designed, built, and tested — thanks to that “miracle material,” which can extend the range of electric cars to as much as 360 miles.

Higher-end electric cars — like Tesla's Model S, for instance, which can currently give you about 300 miles per charge — could soon get you 600 miles with a new battery utilizing the “miracle material.”

That's right, an electric car with a driving range of 600 miles...

Or enough juice to take you from Boston to Richmond, Virginia, without stopping once (assuming you can drive ten hours without a bathroom break).

But that's not even the best part.

The best part is that there's only one company that's got enough of this “miracle material” on hand to supply nearly all of these next-generation electric vehicle batteries.

And that, my friends, is my number one play on electric cars.

Although I must admit what this company will do for electric cars is just the tip of the iceberg...

The truth is the producer of this “miracle material” seems to have its hands into just about everything today: military applications, electronics, oil exploration, health care applications — the list goes on and on.

And it certainly hasn't gone unnoticed that since 2010, there's been a 4,000% increase in demand for this stuff.

Not 40. Not 400. 4,000 percent in two years!

But don't take my word for it... do your own due diligence, and look at the data for yourself.

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

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