Electric Vehicle Investments

Alex C. makes so many wonderful points in his comment on Brass Tack #1 that it’s hard to know where to start.

EV’s and related enabling technologies (batteries, charge stations, motors, inverters, converters, etc.) are great areas to invest in. Avoid investing in small OEMs who are only styling or assembling – instead invest in the suppliers and OEM’s who are leading in the enabling technologies.

There is no doubt in my mind that this is correct. I reviewed a business plan of a start-up whose model is essentially micro-assembly of subsystems into a finished EV. Their plan called for a gross margin of 33%, less 25% to the dealer. Yikes. If their own plan isn’t more optimistic, I’d hate to see what happens in the real world. They had trouble getting funding. It’s not hard to see why.