Trend investing for the future (Part 1)- Electrification

Among my friends who invest alongside me, there will always be questions regarding what are the trends to invest in for the future, for the next decade and beyond. By targeting and focusing on these trends early, we can take advantage of huge growth potential and ride on the waves to reach our financial goals earlier than we expect. 

Here are some trends to invest in and potential stock tickers to keep on your watchlist, take note that these are not in any particular order or preference. Before investing in the following below, please do your own diligence.

Electrification of the future

Countries like China have already embarked on electrification early, and they have a huge headstart compared to counterparts like the US. In fact, they have already mandated that electric vehicles make up 40% of sales by 2040. China has already electrified majority of their private buses, taxis and municipal vehicles. The next step would be to electrify their private cars. As we have seen from history, once the Chinese government sets out to do something, they will do everything in their power to achieve their goals. 

Some of the key companies riding on this electrification wave include 

• NIO - Once almost close to bankruptcy, this company has turned things around quickly with the support from the Chinese government. Now it has become a darling and become sort of a cult stock among many investors. Imagine picking up this stock at less than $10, the returns would be amazing. However, one point to take note is the market cap, as Nio has diluted the shares many times to raise funds. I can see NIO doing very well in the next decade or so due to their extremely strong brand awareness among China consumers, especially among the well-off Chinese consumers. 

• XPEV - NIO's lesser known competitor, Xpeng is also impressing investors with their year on year delivery growth which is comparable to Nio. They have also invested heavily in full self driving and is one of the leaders in FSD in China. I can see XPEV doing well as I can see the electric vehicle market in China alone, being big enough for multiple competitors. The key differentiators between XPEV and NIO is that XPEV manufactures their own vehicles but NIO currently partners with a state-owned company JAC. This can have an impact on the gross margins as XPEV would be able to have more control on their bottomline. 

• PTRA - Perhaps not as well known as the above 2 Chinese stocks, Proterra came to my attention when they were still a SPAC (Ticker: ACTC), but has since changed its ticker to PTRA.  It is a American automotive and energy storage company based on California and they already are generating revenues.  Currently, Proterra is North America's #1 Electric Transit Bus OEM and their biggest competitor is BYD from China. When Biden took over as the US president, he vowed to significantly reduce emissions by 2030 and electrifying buses would be a step in the right direction. With policies that are aimed at funding these bus electrification programs, I can see companies like PTRA doing very well for the next decade due to its first mover advantage and it being a pure-US company, which will allow it to be a huge beneficiary from Biden's infrastructure bill. Do take note that this is a long term play, so patience is key. 

Stay Tuned for more posts related to other trends that watch out for and associated tickers. 

Hope the above information is useful for the readers, if you find them useful and if you have not yet signed up with Moomoo or Tiger Broker, please use my referral link to sign up for them. These promotions given by these brokers are for a limited time only and I would appreciate the support given to me. 

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