Of the variety of exciting and innovative trends for investors to buy into over the next decade and beyond, there’s no denying that the electric vehicle space is one of them. In this segment of Backstage Pass, recorded on Jan. 14, Fool contributors Toby Bordelon and Rachel Warren discuss one legacy vehicle maker that is making serious headway against the competition to get autonomous trucks to market.
Toby Bordelon: I saw an article today that Bollinger, which is an EV start-up. In theory, they’re focused on trucks. Let me show you this right here. This is just what they were talking about. They’ve got a jeep; it looks a lot like a jeep, doesn’t it? Looks a whole lot like a jeep. Both the SUV and the truck there. But that’s what they were working on electric versions of these vehicles.
But they said today that they have delayed their electric trucks indefinitely to focus on commercial delivery vans. Now the trucks have been delayed before. Maybe this isn’t a huge surprise. We’ve seen other start-ups having issues bringing product to market, especially on the trucks. Even Tesla (NASDAQ:TSLA) having issues getting a cyber truck out. Then, Tesla, I don’t even know if I call them a start-up anymore.
This is a company that puts out a million cars last year. They know how to build cars and deliver products to consumers. They’re struggling with getting that next vehicle out. I don’t know about the vans. There’s a lot of companies doing that too. We’ll see what Bollinger actually if they can do anything, get a product out there at some point. Here is my question because there’s actually a lot of ways you can go with this. Thinking about the electric truck market, is there one particular truck you’re most excited about?
If there is one. Do you think you’ll get it this year if you wanted it, will it come to market this year? On the other flip side, is what EV company would be your bet to pick one that would die or might just get acquired out of almost bankruptcy, say for spare parts.
What will that one be, and where do you think the biggest opportunity is in the electric vehicle market. A lot of people seem to think it’s trucks given what we’ve seen in the past year, where do you think it is? I’ll start with you, Rachel.
Rachel Warren: Yeah. This is not a space just for disclosure that I follow super closely. I do tend to think trucks are the area where we might see the most growth, but I was looking into this. One of the things that’s really intrigued me, it’s, yeah, you have these companies like Tesla, like Rivian (NASDAQ:RIVN), which I’ll talk about here in a second, that are very well-known in this space. But I like the fact that you have some of these legacy companies that are trying to go towards a more electric future.
I do think that if you’re perhaps interested in investing in this space, and maybe you’re a little concerned about investing in a company like Rivian, for example, that a company like GM (NYSE:GM), that just unveiled its Chevy Silverado electric pickup truck, which is being slated as potentially the rival to the Ford F-150 Lightning.
CEO Mary Barra has often said for General Motors that they are on the path to this all-electric future. The Chevy Silverado, I don’t think that’s supposed to come out this year. I believe according to most recent reports I saw on NBC, it’s set to go into production early next year, and it will be the second battery-powered pickup that they have, and one of at least 30 all-electric models set to reach the market by 2025.
A little bit of time before that hits the market. What was interesting was this article was saying that visually, the 2024 Chevy Silverado EV might not seem all that much different from a conventional truck, but it is going to have a lot more streamlined features. The conventional grill will be gone, but there will be smaller air intakes feeding air for cooling the low-mounted battery pack and motors. It’s going to have some really cool and nifty features. It’s going to have a really spacious cabin inside, this article on NBC was noting.
But I think, in particular, I do think that the electric truck space has a lot of potential. I found this really interesting report via the IEA. Apparently, it was the global EV outlook for 2021. I don’t know if the one for 2022 has come out yet. But even in 2020, with fewer people out on the roads, fewer people buying things, more than 10 million electric cars were on the world’s roads in 2020 with battery-electric models driving the expansion, according to this report.
That electric car registrations increased in major markets in 2020 despite the pandemic. I also found that very surprising. Apparently in 2020, the global electric cars stock hit the 10 million mark, which was actually a 43% increase from 2019. I think there’s a lot of potential here.
What I’m curious about over the long run, we’re seeing more people are buying these vehicles. But there’s still isn’t something that your everyday driver is going to be buying. I’m wondering how fast this is going to be an area of growth for some of these legacy automakers. What those margins are going to look like.
In terms of a company that could get acquired for spare parts, I tend to wonder will Rivian perhaps in the future, will it be able to succeed once it’s fulfilled those contracts that it has. Like with Amazon (NASDAQ:AMZN), I believe, and Ford (NYSE:F) [Ford and Rivian have confirmed that they will no longer be developing an electric vehicle together], if I have that correctly, and will it be able to expand its customer base once it’s fulfilled those orders. I’m not saying it can’t, but I’ll be curious. I can easily see it becoming an acquisition target though maybe in the next five to ten years.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Source: https://www.fool.com/investing/2022/02/11/this-legacy-company-is-leveling-up-in-the-electric/
