Stocks, ETFs to Benefit From California Gas Car Ban
As California goes, so goes the automotive industry, given the size of the state’s auto market. California Air Resources Board members voted on Thursday to ban sales of new gas-powered cars by 2035, which should accelerate development and sales of electric vehicles in the next decade.
Several stocks and exchange-traded funds stand to benefit from this vote, seen as a monumental decision in cutting carbon emissions and boosting electric vehicles, which many consider to be the future of transportation and automotive design.
Watch these stocks and ETFs as options for future growth in your value portfolio.
Tesla
Rated as an undervalued stock by GuruFocus, Tesla Inc. (
TSLA, Financial) shares are still in their growth phase. The company gets a GF Score of 83 out of 100, so this electric vehicle stock could be one to buy and hold for future profits. With a price-earnings ratio of more than 100, the company is not showing the profits it could be just yet, but it gets a growth ranking from GuruFocus of 8 out of 10 and a momentum ranking of 9 out of 10.
Ford
Ford Motor Co.’s (
F, Financial) F-150 Lightning electric truck and Mustang Mach-E look to add plenty of muscle to the electric vehicle market of the future. Investing in electric vehicles by purchasing shares of traditional car manufacturers is a way of having value stocks with growth potential, but be careful with Ford. GuruFocus gives the company a GF score of 72 out of 100, with its lowest marks in growth, value and financial strength.
General Motors
General Motors Co. (
GM, Financial) is another traditional carmaker with one foot in the future. Electric vehicles, including the Cadillac Celestiq and Lyriq, the Chevrolet Bolt, Silverado and Blazer and the GMC Hummer, should generate plenty of EV excitement. The company gets a GF score of 72 out of 100, with low marks for growth, momentum and financial strength. Those numbers could change if General Motors can transition to EV seamlessly.
Global X Lithium and Battery Technology ETF
The powerhouse that makes electric vehicles run is at the heart of the Global X Lithium and Battery Technology ETF (
LIT, Financial). Battery makers and lithium miner stocks ranging from Albermarle (ALB, Financial) to Panasonic Holdings (TSE:6752, Financial) populate this market-weighted ETF, which has grown more than 140% in share price since 2017. ETFs, with their diversification within sectors, can be less risky to buy than individual stocks.
Apple
Apple Inc. (
AAPL, Financial) may not sound like an EV stock, but the company is developing its own electric car. Computers can move to phones and watches, so why not have an Apple you can drive? Apple gets a stellar 98 out of 100 GF Score and ranks with GuruFocus as fairly valued.
The bottom line
For the value investor, established companies with financial track records will carry the least amount of risk. Those interested in capitalizing on electric vehicles should consider Apple as a potentially good opportunity. In addition, consider an ETF in areas related to EVs to take some of the risk out of lithium investing.
For caution, watch traditional carmarkers to see how well they transition to making electric vehicles and Tesla for signs of it transitioning from a risky growth stock to value stock in the future.