Tom Konrad has another installment in his series on peak oil themed investing - The Best Peak Oil Investments: Ten Electric and Hybrid Car Stocks.
Tesla Motors (TSLA) is not the only electric vehicle (EV) stock. Here are nine other public companies helping to replace petroleum with electricity in our cars and trucks.
Early in this series on the Best Peak Oil Investments, I put together an in-depth comparison of alternative fuels. I concluded that the best prospect for displacing oil in the long term is electricity supplemented by biofuels. Vehicle Electrification is likely to come to dominate the transportation sector because only renewable electricity can supply energy on the scale that we currently use for transportation with limited use of land area. Biofuels require far more land area to propel a vehicle the same distance.
Many investors see the long term promise of Electric Vehicles (EVs) and think it means that the first EV stock to go public on a North American exchange, Tesla Motors, Inc. (TSLA), will inevitably take off. Similar thinking lead to the strong investor response to the A123 (AONE) IPO last year. Such investors should remind themselves that just because an industry has great long term prospects does not mean that the early IPOs are great investments. Solar energy also has great long term prospects, but investors who bought Sunpower (SPWRA) in the month after its IPO in 2006 for $26 to $32 would now only have half their initial investment after four years. Earlier solar IPOs were even worse. Does anyone remember Astropower? The company declared bankruptcy in 2004. I can't find the date that it went public, but I remember that it was public in 1999 when I attended an investor presentation by the company President Dr. Barnett. I bought and sold a small position in the stock shortly after for a nice profit, holding it less than a month. I believe the people who make the most money on Tesla will also be the traders, not the long term investors, at least in the next few years.
A great technology does not guarantee a great stock, and buying the high-profile leader in a hot sector does not make an investor's prospects any better. So if you still want to invest in vehicle electrification, here are nine other companies to consider. Most are dogs, but one or two will almost certainly do better than Tesla, and the fact that these stocks are getting so much less investor attention means that you have a much better chance finding a diamond in the rough.