Why EV Makers Will Win

by Tony Sagami
By Tony Sagami

My mobile phone is only two years old, but the battery has lost most of its ability to hold a charge. I get about two hours out of a full charge now.

I know, it’s normal for a battery’s performance to diminish over time, but the mobile phone repair shop wanted $150 to replace the battery.

That’s just for an itty-bitty mobile phone battery. I shudder to think how much it will cost to replace the battery for an electric vehicle.

EVs haven’t been around long enough for us to know how they age over time and retain their battery-charging capacity.

EV batteries are actually a big group of individual lithium-ion cells, each of which can store a certain amount of power. And like all batteries, they start to deteriorate the second they’re built, losing storage capacity over time.

Think of it this way: The shrinking storage capacity of an EV battery would be like the fuel tank on a traditional internal combustion engine getting smaller every year.

The bad news is that EV batteries run out of juice-holding capacity about the same time that EV warranties run out.

Generally speaking, the industry standard for an EV battery warranty — Nissan’s (NSANF) Leaf, for instance — is eight years or 100,000 miles, whichever comes first.

The life cycle of an EV battery varies greatly based on individual use and charging habits. Someone who doesn’t do much driving may never have to replace the battery, but high-mileage drivers will definitely have to replace theirs sooner rather than later.

Now, let’s take a look at …

Symptoms of a Bad EV Battery

  • Reduced fuel economy (hybrids only): If you suddenly notice that your overall fuel economy on your hybrid isn’t as good as it used to be, your traction battery may be going bad.
  • Fluctuating charge levels: If your EV battery says that it’s fully charged one minute and empty the next, you may have an issue with your battery pack.
  • Low battery after sitting: If you park your EV and the battery is low by the next morning, you almost certainly have a failing battery.
  • Loud fan noises: If you constantly hear the fans running on your EV, that could mean the battery is overheating and may fail soon.

How much will it cost to replace an EV battery? According to Consumer Affairs, the average cost to replace an EV battery ranged from $4,489 to a staggering $17,658.

A warning to Tesla (TSLA) and Nissan fans: You’re going to pay through the nose.

Battery replacement cost.
Click here to see full-sized image.

 

Regardless, there is no doubting that the future of transportation is all-electric vehicles, and with the prices of lithium and other battery metals skyrocketing, investors would be remiss to not take advantage.

That’s what members of my trading service, Disruptors & Dominators are doing. Based on my recommendations, they have positions in a lithium manufacturer, a vehicle auction company and an EV maker, while enjoying gains of around 53%, 31% and 26%.

Both state and federal governments are setting deadlines for when the last new gas-powered cars can be sold, generally targeting 2035.

Those government mandates and high battery replacement costs are going to make EV makers into extremely profitable businesses. Make sure you have one in your portfolio.

If you pick the right one, you will make a mountain of money.

All the best,

Tony

About the Technology Analyst

Even in the worst years for stocks, Tony was twice named “Portfolio Manager of the Year” by Thomson Financial. He was one of the first to introduce computer software for trading stocks. And in the early 2000s, he wrote “The Supernet,” providing a vision of the future internet that was far ahead of its time.

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