The average cost to fill up a car tank is currently over $50. The average cost to charge an EV is currently around $11. From the data I can gather, this is the widest spread ever between the two.
I am actually in agreement with Cathie Wood - and yes, I am aware that a lot of people give her a hard time. Her ARKK funds have been crushed as of lately, and she said crude oil would go back to $12. Those are not great calls and she has been wrong. So I kind of understand the criticism, but she has also built one of the largest actively managed funds in an industry of mostly males. I like to think of myself as a contrarian at times, and what she's done is amazingly contrarian. Against all odds she has $20+ billion in AUM.
But, back to the point, electrical vehicle adoption has been rising pretty fast. Some estimates see 25% of all vehicles being EVs in the next few years. And now oil is rising, headlines everywhere. What does that mean? I like to think it will be more bullish marketing for EVs. Think about what Covid did to tech adoption from video calls to company chats. Monumental events like this can speed up adoption curves up even more.
I also understand what a shock to supply can do to the demand curve. Suddenly there is less supply of oil, but the demand curve remains, and oil prices has no other option to go up. But one thing I have always observed time and time again, no matter how bad a situation is - humans are pretty clever and usually find a way to do things better, faster, and more efficient.
In the short-term I am thinking about all the oil in the world today. Is it possible to drill for oil and go green at the same time? I think so. America, Canada, and Mexico are sitting on some of the largest oil deposits on planet Earth. If you go into South America, both Brazil, Colombia, and even Ecuador have oil. So my view is that these kinds of events can sometimes also shift things really fast.
Bullish Latin America? Bullish Canada? Is there another country or company out there looking to fill the void?
All interesting things to consider. I will be scanning and looking for interesting ideas globally that fit this criteria.
Anyways, I am not making any bold claims about going long or short anything. But I am definitely betting on the side of innovation, especially EVs as a tool to combat prices in the long-term. Short-term panic and mania, long-term calm and collected.
I'll have more later, so stay tuned. I have thoughts about wheat and other commodities. Thanks for reading!
KEY TAKEAWAYS Charging your EV at a commercial charger on a road trip, from almost empty to almost full, will normally cost between $10 and $30, when using a level 3 charger. This cost can vary a lot, however, depending on a variety of factors—where you are, and what kind of chargers you use. That can make the cost of a road trip in an EV higher than the cost of using a conventional vehicle. In order to limit costs, you should use apps like A Better Route Planner or PlugShare to plan a route that takes in charging stations, and use supermarket and hotel chargers when possible.
Great post! Oil always finds a way, and rising prices provide a strong incentive to ensure that it does. Drilling is a lot more profitable than in the past, and thus encourages more production and investment. More importantly, we've seen from history that there isn't a causal relationship between oil prices and stock market returns. In my opinion, as time passes, and uncertainty regarding inflation, regional conflict, and rate hikes are resolved, supply and demand reach an equilibrium once again.
scheplick
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@Michael_Wang_Official, Waiting for your next post! Always enjoy reading your thoughts. Would be curious to hear what you're looking at and the symbols you're watching
Options360
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Great analysis. Thoughtful and well said.
savemoney2020
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I Honestly did not get anything from that post, all I can say is the quality of Tesla vehicles are an easy 5/10 and Maintenance on them regarding the battery will offset the savings on gas, also they take forever to fix Tesla issues and on top of that in a recession base economy and rate hikes, no average American will take a car not for a 5/10 build ev worth over 38k when there are cheaper cars that are good on gas like Toyotas or Hondas.
scheplick
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@savemoney2020 Come on, I dropped a few stats in there 😂
fringe_chartist
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@savemoney2020, not only that. How many recalls has Tesla had in the past 6 months? 5? 10? I lost count. And a few of them weren't small things ex. braking in the middle of the highway and killing someone, not stopping at stop signs, crashing into a barrier on the highway. Imagine if conventional, non government subsidized companies put out cars like this. The cars would be BANNED from roads. Yet we're supposed to put up with this science experiment and drive on the highway with cars running experimental software, putting our health in jeopardy, simply because the whole government owns Tesla stock and funds the whole show.
Granted, I'm not totally against EVs. I just think they are hugely impractical at the moment and practical implications have gone out the window, overshadowed by the hype. But spending 20k to replace the battery totally offsets any savings from gas. Even if gas goes twice as high, it's still not worth it imho since nobody can afford EVs in the first place. Not to mention, look at the current price trajectory of nickel.
Charging your EV at a commercial charger on a road trip, from almost empty to almost full, will normally cost between $10 and $30, when using a level 3 charger.
This cost can vary a lot, however, depending on a variety of factors—where you are, and what kind of chargers you use.
That can make the cost of a road trip in an EV higher than the cost of using a conventional vehicle. In order to limit costs, you should use apps like A Better Route Planner or PlugShare to plan a route that takes in charging stations, and use supermarket and hotel chargers when possible.