EV sales jumped 43% in 2020 while overall car sales decreased by 20%, and there’s still plenty of room to run on the electric playing field, according to some of the biggest wealth managers, but there’s a potential big industry disruptor here …
One of the next big shake-ups in the auto industry - and one that will help, not hinder the adoption of EVs - is the burgeoning car subscription business.
The car subscription market is set to top $12 billion by 2027, and many of the big car makers are making moves on it, from Porsche to Volvo … and even to Hertz itself, since there is a big opportunity here.
But Washington, D.C.-based Steer combines two big trends: subscriptions and EVs, making it one to watch in this sector.
Acquired by Canadian Facedrive in Q3 2020, Steer - like Facedrive itself - is all about getting out in front of the newest trends, first…
And turning carbon-offset offerings into profitable tech-driven verticals.
They like to rent and move on to the next best thing. They aren’t auto loyalists looking to get tied down with a major loan or lease commitment.
Leases were already becoming a favorite for many millennials as far back as 2016 when 34% of them chose leases over financing.
We think what millennials will like even more is the flexibility of a subscription, and the hassle-free way to own their favorite vehicles - electric.
That’s where Steer comes in to fill one of the gaps in this emerging trend…
Your Own EV Garage At the Touch of a Button
Steer is a new all-inclusive, monthly, low-risk car subscription service that features 100% electric, plug-in, and hybrid vehicles.
And the company was created with an overriding ambition: To take the EV industry one step further by helping to change the way people view car ownership, forever…
Let’s not mince words, here: The car ownership experience is woefully lacking. From the annoyance of haggling with that special breed of car dealers… to the hassle of shopping for, paying for, and attempting to understand the nuances of insurance… to myriad financing options, all of which tie to you a car you don’t want to be committed to for so long…
There was minimal flexibility in this market until the advent of subscriptions.
And there were very few carbon-offset subscription options for that rapidly growing lineup of new EVs… until Steer.
Steer is one of the answers to the last remaining hurdle of full-on adoption of EVs: cost and charging technology.
A subscription to Steer comes with your own concierge who delivers your car wherever you need it and assists with charging, either at home or on the road.
Unlike leasing a car, there’s no mileage limit.
With Steer, members get their own virtual gallery to fit various budgets, including everything from the Audi e-Tron and the Hyundai Kona to your favorite Tesla, and beyond.
And the growth runways are excellent when you consider that 70% of Steer members have never even driven an EV before. That means that these are new converts.
Facedrive, Steer and Giant Exelon: The Next Phase of Change
Facedrive (TSX.V:FD; OTCMKTS:FDVRF) acquired Steer from Exelon (NASDAQ:EXC) in a deal that included a $2-million strategic investment by energy giant Exelon’s wholly-owned subsidiary, Exelorate Enterprises, LLC.
Together, they could pose a positive challenge to an auto industry that’s already trying to adapt to the changing EV industry.
And the leaders are emerging as those who can do two things: tie their business into the “ESG megatrend”, where big money is starting to flow; and understand what today’s market wants: on-demand service and dynamic options.
Steer’s seamless, hassle-free technology and its lineup of hot EVs do both.
It’s what some are calling a Netflix style of new car use.
In the meantime, Facedrive is all about clean, tech-driven verticals, and Steer is just one.
Facedrive recognized the need for a big energy-related lifestyle change long before it became a “trend”.
It was developing an answer to the pollution of companies like Uber and Lyft way back in 2016 and launched the first carbon-offset ride-sharing platform in 2019 in Canada, giving riders a choice of EV or hybrid and planting trees in cooperation with local authorities along the way.
Today, in the name of corporate responsibility in a time of pandemic, Facedrive is focusing more aggressively on Steer, carbon-offset food and pharma deliveries, and TraceSCAN, the Ontario government-backed COVID contact-tracing wearable technology that is aiming for rapid manufacture and deployment to help enable essential workers to get back on the job - safely - and in turn to help enable the economy to reopen, and stay open.
Throughout, from Steer to TraceSCAN and Facedrive Foods, this Canadian ‘Silicon Valley’ style company has focused on people and the planet, without sacrificing the pursuit of profits - a holy grail for emerging tech companies in the middle of an ESG transition.
There’s an important shift happening in consumer behavior, and Facedrive (TSX.V:FD; OTCMKTS:FDVRF) intends to be out in front of it all the way. In our view, this is definitely one stock to watch closely.
Other companies to watch as the electric vehicle boom accelerates:
Tesla (NASDAQ:TSLA) is without a doubt one of the hottest stocks on Wall Street. And that’s a big deal for the electric vehicle market. As one of the world’s most exciting -and important- car makers, it has made going green a must in this incredibly competitive industry. Its modern design has become an industry standard. Tesla has single-handedly made electric vehicles cool, and has fueled the dramatic rise in this burgeoning market since its inception.
Elon Musk had his eye on prize long before the green energy hype started building. In fact, he released the first Tesla Roadster back in 2008, making electric vehicles desirable when people were laughing at first-gen electric vehicles. Since its IPO, Tesla’s stock has skyrocketed by over 18,000%. Largely thanks to its energy innovation.
In addition to producing one of the most desirable electric vehicles on the market, Tesla is ramping up its solar and battery game, as well. Tesla’s Solar Roof project aims to change the way houses function. It replaces traditional roofs with stronger, and arguably more aesthetically pleasing, solar panels that can power your entire home. It also comes in as the lowest-cost-per-watt solar option in the American market. And its in-home superbatteries will be a game-changer for storing and distributing electricity in the future.
Tesla’s influence hasn’t been ignored overseas, either. NIO Limited (NYSE:NIO) used to be an outlier in the EV market. In fact, much of Wall Street was to write off their losses and give up on the company. It was even on the brink of bankruptcy But China’s answer to Tesla’s dominance powered on, eclipsed estimates, and most importantly, kept its balance sheet in line. And it’s paid off. In a big way. The company has seen its share price soar from $3.24 at the start of 2020 to a high of $50 earlier this year before falling back to its current price of $38.
And November of last year, NIO unveiled a pair of vehicles that would make even the biggest Tesla devotees truly contemplate their brand loyalty. The vehicles, meant to compete with Tesla’s Model 3, could be exactly what the company needs to take control of its domestic market.
It’s not just about slick cars, either. Nio, Tesla’s largest competitor in China, has also started to offer a batteries-as-a-service concept, in which car buyers can ‘lease’ the battery of their vehicle and save as much as $10,000 on the price of a new vehicle, while also offering buyers the option to swap batteries after a few years of use. And that’s huge news in the lithium world, because it will mean give miners even greater incentive to sign deals with the battery innovator.
Apple (NASDAQ:AAPL), as the largest company in the world, has lead the tech world for years…but it’s more than just that. From the products themselves to the packages they came in, and even the data centers powering them, Apple has gone above and beyond to cut the environmental impact.
And now, it’s even getting into the transportation business. "We're focusing on autonomous systems. It's a core technology that we view as very important. We sort of see it as the mother of all AI projects. It's probably one of the most difficult AI projects actually to work on." Apple CEO Tim Cook on Apple's plans in the car space. Electric vehicles aren’t likely to be left out, either…
Apple's rumored car design means that more active material can be packed inside the battery, giving the car a potentially longer range. Apple is also examining chemistry for the battery called LFP, or lithium iron phosphate which is inherently less likely to overheat and is thus safer than other types of lithium-ion batteries.
Legacy automakers are on the green-grind, too. Toyota Motors (NYSE:TM) is a massive international car producer that hasn’t ignored the transition to greener transportation. In fact, the Toyota Prius was one of the first hybrids to hit the road in a big way. While the legacy hybrid vehicle has been the butt of many jokes throughout the years, the car has been a major success, and more importantly, it helped spur the adoption of greener vehicles for years to come.
And just because its Prius hasn’t exactly aged as well as some green competitors, Toyota hasn’t left the green power race yet. Just a few days ago, actually, the giant automaker announced that three new electric vehicles will be coming to United States markets soon.
“We continue to be leaders in electrification that began with our pioneering introduction of the Prius nearly 25 years ago,” said Bob Carter, TMNA executive vice president of sales. “Toyota’s new electrified product offerings will give customers multiple choices of powertrain that best suits their needs.”
Toyota has a major hold over U.S. markets at the moment. In fact, it maintains a 75% share of total fuel cell vehicles and a 64% share in hybrid and plug-in vehicles. And now it’s looking to capture a greater share of electric vehicles, as well.
Investors shouldn’t ignore the infrastructure needed to fuel the electric vehicle boom, either. Blink Charging (NASDAQ:BLNK) an electric vehicle charging company, will play a vital role in the lithium market for years to come. Why? Because its charging infrastructure will fuel even greater demand for the increasingly popular metal. And it’s been a great stock for investors, as well. It’s seen its share price soar significantly over the past year and it’s showing no signs of slowing. A flurry of new deals, including a collaboration with EnerSys have created some support for the relative newcomer.
Michael D. Farkas, Founder, CEO and Executive Chairman of Blink noted, “This is an exciting collaboration with EnerSys because it combines the industry-leading technologies of our two companies to provide user-friendly, high powered, next-generation charging alternatives. We are continuously innovating our product offerings to provide more efficient and convenient charging options to the growing community of EV drivers.”
Another high-profile deal between Blink and Envoy Technologies to deploy electric vehicles and charging stations adds further support to the company’s stock price.
Aric Ohana, CEO of Envoy noted, “We’re excited to work with Blink on the deployment of their fast Level 2 charging stations as part of our exclusive electric car-sharing service. The vision of our two companies is aligned: to advance the adoption of electric vehicles. To continue to drive the growth and success across our expanding locations, we have to ensure that our clients have easy and efficient access to high-quality, reliable charging equipment. Blink has an established reputation as an innovator in the EV market, and we are thrilled to add them as a preferred partner.”
Celestica (TSX:CLS) is a key company in the lithium boom due to is role as one of the top manufacturers of electronics in the Americas. Celestica’s wide range of products includes but is not limited to communications solutions, enterprise and cloud services, aerospace and defense products, renewable energy and enough health technology.
Thanks to its exposure to the renewable energy market, Celestica’s future is tied hand-in-hand with the green energy boom that’s sweeping the world at the moment. It helps build smart and efficient products that integrate the latest in power generation, conversion and management technology to deliver smarter, more efficient grid and off-grid applications for the world’s leading energy equipment manufacturers and developers.
Like the rest of the market, Celestica fell victim to the massive selloff sparked by the global COVID-19 pandemic, seeing its share price fall into the $2 range in March 2020. Since then, however, the stock price has soared by nearly 400% to its current trading price of $8.45. As the world races towards a greener future, however, the upside potential for Celestica could be even higher.
Teck Resources Limited (TSX:TECK.B) is one of Canada’s largest and most diversified resource companies, with operations across the globe. While its primary mining and mineral development plays focus on steelmaking coal, copper and zinc, Teck also has a major stake in renewable energy ventures.
In a release on Teck’s website, the company explains why this investment is so important: “Flow batteries – such as the zinc-air battery developed by ZincNyx, with its flexible and low-cost scaling, long-term storage properties and the ability to separate the energy storage function from the power generation source – could provide a more efficient alternative for large-scale energy storage.”
Teck Resources fell to just $7 per share in March of last year due to the market chaos sparked by the COVID-19 pandemic. Despite this downturn, however, the company was able to rebound significantly, rising by nearly 180% to its current prices.
Lithium Americas Corp. (TSX:LAC) is one of North America’s most important and successful pure-play lithium companies. With two world-class lithium projects in Argentina and Nevada, Lithium Americas is well-positioned to ride the wave of growing lithium demand in the years to come. It’s already raised nearly a billion dollars in equity and debt, showing that investors have a ton of interest in the company’s ambitious plans, and it will likely continue its promising growth and expansion for years to come.
It’s not ignoring the growing demand from investors for responsible and sustainable mining, either. In fact, one of its primary goals is to create a positive impact on society and the environment through its projects. This includes cleaner mining tech, strong workplace safety practices, a range of opportunities for employees, and strong relationships with local governments to ensure that not only are its employees being taken care of but locals as well.
Lithium Americas’ efforts have paid off in the market, as well. While many companies across multiple industries struggled last year, Lithium Americas’ stock soared. In February last year, the company’s stock price was sitting at just $5.26, while today it is at $14.25.
Maxar Technologies (TSX:MAXR) is a high-flying tech stock to watch in the energy transition. Why? Its wholely-owned subsidiary, SSL, a designer and manufacturer of satellites used by government and commercial enterprises, has pioneered research in electric propulsion systems, lithium-ion power systems, and the use of advanced composites on commercial satellites. These innovations are key because they allow satellites to spend more time in orbit, reducing costs and increasing efficiency. And it’s greener than traditional power sources.
Thanks to Maxar’s incredible tech and innovative approach to the already extremely complicated space industry, the company has seen its share price climb where many of its peers have struggled. In fact, in just the past two years, Maxar has seen its share price increase by well over 1000%. And as the company secures more deals in the great beyond, the innovative firm will likely maintain its upward trajectory for some time.
Westport Fuel Systems (TSX:WRPT) isn’t a lithium play, but it is an important company to watch in the global energy transition. Especially as the world races to leave behind traditional gasoline and diesel-powered vehicles. Because it is a manufacturing play at heart, it is a unique way to get in on the boom in the alternative fuel auto industry.
Westport Fuel has been making major moves in the market over the past year, and its efforts are finally coming to fruition. Since February 2020, the company has seen its stock price rise by 348%, and with more potential deals like the one it has just sealed with Amazon to provide natural gas-powered trucks to its fleet, the stock has even more room to run in the coming years.
By Ed Johnson
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that subscription based car services for ride sharing services will help with the adoption of EVs; that millennials will like the flexibility of a subscription based car service for ride sharing; that subscription based ride sharing services will create flexibility and a carbon reduced option in the auto industry; that Facedrive and Steer will pose a positive challenge to the auto industry; that Facedrive and Steer will emerge as leaders in the business of car subscription services for ride sharing; that there will be an important shift in consumer behavior and Facedrive will be in front of it; and that Tracescan will be mass manufactured and will help get workers back on the job. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that subscription based car services for ride sharing may not help the adoption of EVs; that subscription based ride sharing services may not be popular with millennials or others as anticipated or at all; that ride sharing subscription services may not become widely accepted or used by consumers; that Facedrive and Steer may not emerge as leaders in the business of car subscription ride sharing as anticipated or at all; that there may not be a shift in consumer behavior leading to increased popularity in ride sharing subscription services and that such services may not gain the anticipated or even any popularity among consumers; even if they do, Facedrive may not be able to profit or become a profitable company. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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