Since the beginning of its inception, an enormous amount of money has been invested in the electric vehicle (EV) industry.
And unfortunately, almost as much has been lost.
Many companies have tried to tap into the EV space over the years only to throw in the towel and go back to what they know… Or go bankrupt trying to make it work.
These EV failures include Bright Automotive, AMP, Detroit Electric and LeEco, just to name a few.
Tesla (TSLA), now the number one EV company in the world, was the first to create both a successful EV model as well as profitable business model. Yet even Tesla, under the leadership of Elon Musk, almost went bankrupt twice as it was figuring everything out.
And the past year, the EV industry was rocked again. Tesla (TSLA) lost half its value, and the story gets worse from there. Investors in Rivian Automotive’s (RIVN) once acclaimed initial public offering have lost 90%. And Canoo (GOEV), which was worth billions in 2021, is now a penny stock.
And those are the companies that are still around.
But even in the midst of this volatility, we know that growth in electric and hybrid-electric cars is set to outpace the rest of the market.
Goldman Sachs Research predicts that by 2040, the percentage of EVs sold in the U.S. will increase from 2% of all vehicles (as seen in 2020) to 85% by 2040. And that globally the percentage of electrical vehicles sold will increase to 61% by 2040.
At the Intelligent Income Daily, we’re always searching for investment opportunities that will deliver you safe, reliable income for years to come.
Today, I’m sharing how you can profit from this unstoppable trend without investing in a risky start-up. This market has set up the perfect chance for you to profit from a vehicle titan in the EV space, and earn a nice dividend along the way.
The EV Manufacturing Renaissance
Right now, there’s a manufacturing “renaissance” taking place across America. In recent years, the private sector alone has invested half a trillion dollars in new manufacturing in the U.S.
Understandably, semiconductor factories tend to dominate headlines. I recently wrote about the $25 billion Samsung project underway just an hour from my house in Taylor, Texas.
But one series of mega-projects is getting less attention.
I’m talking about the facilities that build electric vehicles and/or the batteries that power them. Funny enough, my Wide Moat colleague Brad Thomas lives close to the giant plant I want to tell you about today.
This shows you just show widespread the reindustrialization of America is. It’s happening in my home state of Texas and on the eastern coastline of the United States.
The $5.6 billion project I am referring to is located in Liberty, North Carolina.
And the leader of this investment already employs more than 48,000 people in North America. Most of those are in the U.S.
This new factory will be the company’s 14th location just in the state of North Carolina.
The batteries produced in Liberty, North Carolina will power vehicles that it sells all around the world. Including those booming in Asian markets.
And unlike the long list of faltering EV stocks I mentioned earlier, today’s company is very profitable. It didn’t IPO (initial public offering) in 2020’s tech bubble, either. It was incorporated in 1937.
The $192 billion market cap heavyweight I’m talking about is Toyota Motor Company (TM). Toyota also happens to be the inventor of the first mass market hybrid vehicle. You know it as the Prius.
Best in the Space at a Bargain
Toyota isn’t just a pioneer in hybrid and electric vehicles. It’s sold more than 15 million of them. And unlike most of its EV peers, it has made a ton of money doing it. I believe Toyota will set hybrid and electric vehicle sales records and collect a mountain of cash doing so.
There is another big difference between Toyota and the other brand names in hybrid and electric vehicles.
It’s cheap. Dirt cheap.
Thanks to a tough stock market, Toyota trades at just 9.9 times forward earnings. For comparison, the U.S. stock market trades at about 20 times.
That means Toyota is selling at half-price. It also pays a nearly 3% yield – that’s almost twice the S&P 500’s 1.6%.
By buying shares, you can directly benefit from the transition to hybrids and EVs without taking unnecessary risk.
And you’ll join in on the re-industrialization of America. Don’t miss out.
Stephen Hester, CFA
Analyst, Intelligent Income Daily
P.S. If you are interested in other attractive income plays just like this, subscribe to Intelligent Income Investor for handpicked investments from our team of Wide Moat analysts.