Tesla Inc. (Nasdaq: TSLA) is getting into the business of making robots. CEO Elon Musk announced that the Tesla Bot will be a 5’8” humanoid bot, powered by the same artificial intelligence that runs Tesla’s cars. It will be able to perform basic human tasks like picking up groceries.
This is the same Elon Musk that warned as recently as last year that AI-driven robots could conquer the world and enslave humanity by 2025. So, we’ll see how this works out!
You have to hand it to Musk. He’s a dreamer. He has already managed to do something that would have seemed impossible even 15 years ago: He made electric cars cool.
Tesla isn’t the first company to make an electric car. General Motors launched the EV1 in the mid-1990s. And, believe it or not, the first electric vehicle (EV) was made a century before, in 1890. Almost every major automaker has attempted an electric model over the years, but none of them caught on. They weren’t cool. Most of them were boxy and awkward.
And then Tesla came along. Suddenly, you had an electric car that performed as well or better than a high-end sports car. It had attractive styling. And it had an impressive computerized dashboard that looked like something out of a science fiction movie.
Electric vehicles were no longer just the domain of ardent environmentalists. They were finally ready for a wider audience.
But here’s the problem. While Musk and Tesla deserve all the credit for launching the twin revolutions of electric vehicles and self-driving vehicles, it hasn’t had the best track record of seeing those revolutions through to completion for a few reasons:
- Tesla has had a difficult time producing to scale. Musk has called it “delivery logistics hell.”
- It has constant production delays.
- And it has yet to turn a consistent profit.
Furthermore, Musk has spread himself too thin, trying to run Tesla while also running his rocket company SpaceX. He often seems frazzled and unfocused.
Now the legal troubles are starting. The National Highway Traffic Safety Administration just announced an investigation into Tesla’s self-driving tech after several vehicle crashes. And two senators are now pushing for a probe into whether Tesla might have overstated the abilities of its self-driving technology.
Electric Vehicle Stocks Will Thrive
I believe in an electric future. It isn’t even a “future.” It’s the present in a large swath of the developed world. In Norway, electric vehicles already make up more than 70% of new car sales, and across Europe, the number is already 10%. Worldwide, about 5% of new car sales are electric, but by 2030, electric vehicles are expected to make up 26% of total sales. By 2040, the figure is expected to be more than 72%.
This is happening, and it’s happening now.
I love this trend, and I expect to see major, market-crushing profits from it. But I don’t believe that Tesla is the best way to play this. Not even close. Tesla currently ranks “Bearish” in my Green Zone Ratings system.
You could go for an exchange-traded fund (ETF) like the iShares Self-Driving EV and Tech ETF (NYSE: IDRV). It offers broad exposure to the EV and tech space and holds plenty of electric vehicle stocks that rate “Bullish” to “Strong Bullish” in our system. Stocks like Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM) and Garmin Ltd. (Nasdaq: GRMN). Of course, Tesla also makes up almost 4.6% of its assets under management.
ETFs like IDRV are great for diversification within a certain sector or theme like electric vehicle stocks, but you have to take the good with the bad. And when a struggling stock makes up a good portion of a portfolio, it drags the rest of the fund down with it.
In Green Zone Fortunes, I recently recommended a traditional automaker that is poised to become the global leader in electric vehicles. Its high-end lines are already in the process of going 100% electric, and its mass-market brand is in a position to make electric vehicles affordable to the general public, even in developing countries. It also rates as a “Strong Bullish” stock in our system.
If you’re looking for a company to out-Tesla Tesla and make a killing while doing it, this is the company.
To see how you can join my Green Zone Fortunes readers and gain access to my high-conviction EV stock recommendation click here. You’ll learn about another stock mega trend that I am incredibly bullish about, and see the details on joining my premium service today.
I hope you’ll join us!
To good profits,
Chief investment strategist, Money & Markets