Did OPEC Just Give the Electric Bus Market a Shot of Steroids?
Check out this chart of electric vehicle (EV) sales in 2021...
Without question, China dominates the global EV market.
It's not even close.
But as investors, there's more to understanding the value of this market than just looking at past and present EV sales numbers.
You see, it's not just about where the market has been.
It's about where it's going.
And if you peel back the layers of IEA data, you'll find a data point that is far more important than how many EVs have been sold to date...
Demand growth relative to total automotive demand.
And nowhere is this more consequential than in Europe, where an already-strong market boosted by significant government support and well-funded public-private buildouts of EV charging infrastructure is battling with petrol prices that make driving traditional internal combustion vehicles cost-prohibitive.
In some European countries, petrol prices have exceeded $8.00 per gallon. And those prices are not going to decrease as Russia continues to squeeze the life out of Europe's energy economy.
And to make matters worse, OPEC just announced yesterday that it's slashing oil production by 2 million barrels per day, which represents the largest cut in oil production since COVID-19 put the brakes on nearly everything.
While this isn't particularly good news for the good people of Europe who are just trying to survive this coming winter, this is fantastic news for the EV sector, which tends to do quite well when oil prices rise.
The continued rise in petrol prices, along with the general vulnerability of the EU's transport sector because of its reliance on oil imports, really makes the region fertile for EV growth.
We're already seeing proof of this too.
If you break it down to EV sales per 1 million people, Norway, the U.K., Germany, and the Netherlands are already coming in higher than China.
Again, this is a significant data point to absorb when analyzing the EV markets with the greatest promise of growth.
Another data point to consider is the type of EVs that offer the most growth and profit potential.
While we spend a lot of time talking about daily commuters driving EVs, the big money is actually in the electric bus sector. The Best Free Investment You'll Ever Make Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
According to Bloomberg, the advance of electric buses will not only exceed the growth rate of electric passenger cars, but in almost all charging configurations, electric buses have a lower total cost of ownership than conventional municipal buses.
And once again, the EU has involved itself in the transition away from internal combustion to vehicle electrification with the development of government-mandated protocols that now require local authorities to ensure at least 25% of all new buses purchased be electric in less than three years.
Meanwhile, the U.S., China, and Canada also have their own mandates in place to help grow the electric bus sector.
Globally, the electric bus market is expected to grow from 78,240 units in 2021 to 1,383,480 units by 2029, representing a CAGR of 43.2% (2022 to 2029).
This is not trivial, and it's one of the reasons I've already been capitalizing on the growth of the electric bus market with one of the most successful electric bus component manufacturers in the world.
This particular company is involved with everything from charging stations to batteries to the buses themselves. And it's also directly connected to the biggest transportation players in the world, including Tesla, Honda, Daimler, GE, Delta, and Mercedes-Benz.
In its most recent quarter, the company saw a 27% increase in total revenue ($74.6 million compared with $58.5 million in Q2 2021) and a 93% increase in battery production, delivered 52 new electric buses, and had more than $500,000 in cash and cash equivalents.
While the market's been in a tailspin, this relatively unknown electric bus manufacturer has been crushing it, and orders continue to roll in.
I know everyone wants to get in on the next Tesla, but the next Tesla is not an electric car company. It's an electric bus company. And when all is said and done, this thing could absolutely be bigger than Tesla.
And if you don't believe me, just look at the numbers for yourself.
No matter how you slice it, there's a lot of money to be made in electric buses, and this is where you'll get the most bang for your buck.
To a new way of life and a new generation of wealth... Jeff Siegel
@JeffSiegel on Twitter
Check us out on YouTube!Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor's page.