To The Moon

Strategy 1

The Rise of China

NIO (NYSE:NIO) Market Cap:58Bil (Comparison)

One of the — if not the — biggest trends of 2020 was the incredible share price gains of electric vehicle compa- nies. Tesla [NASDAQ: TSLA] rose 743%, while Chinese upstart Nio [NYSE: NIO] saw even higher gains, returning

1,112% in just a single year.

What’s behind the optimism? Researcher IHS now

believes electric vehicle sales will rise by 52% com- pounded across the coming years, hitting a total of 12.2 million cars by 2025.

Xpeng (NYSE:XPEV) Market Cap: 21Bil (Recommendation Price 28$)

(The best claim to being the Tesla of China)

Xpeng was founded in 2015 but has rapidly put itself in position to lead China’s EV revolution. The company produces the three best-selling SUVs in China, with a focus on its technology, which includes a large self-driving car division. .

Strategy 2

Next-Generation Transport Opportunities

It’s not just electric cars that are making noise in the market, from buses to helicopters, EV companies are transforming transportation.

Just consider:

• Ɋ Joby Aviation, a company building electric- powered vertical takeoff and landing (VTOL) taxis that look like a combination of a plane and helicopter, announced on February 24 that it is going public in a $6.6 billion transaction.
• Ɋ Proterra, an electric bus company, announced in January it will be going public in a deal valuing it at $1.6 billion.

As of 2019, 99% of the world’s electric buses were in China, but the situation appears set to shift. Rapid decreases to electric battery costs is making their use in industries ranging from semitrucks to buses and even to air travel extremely likely in the next decade.

That’s important because mass transit and shipping are massive markets. In 2019, Americas took 9.9 billion trips on public transit. In addition, there are 1 million new buses registered annually in America. With the price of a bus being an order of magnitude larger than a car, you can see why this market opportunity is so exciting! So, what’s the best way to invest in this trend? A key theme of this report is pinpointing the ideal time for growth in markets. While companies like Proterra and Joby are exciting, the explosive growth in markets like electric aviation and mass transit will likely trail cars by years.

Below we’ve recommended a company that has massive growth opportunities from the green economy today, but in the years to come could see electric buses become a massive catalyst.

TPI Composites (NASDAQ:TPIC) Market Cap: 1.51Bil (Recommendation Price 42$)

Today, TPI Composites’ business is over- whelmingly wind turbine blades. That’s been a good business to the company, which has grown sales at a compound annual growth rate of 23? across the past five years.

(For perspective, that’s a stronger growth rate than Alphabet [nasdaq: goog, googl], which owns Google.)

And yet in the years to come TPI, could see huge tailwinds that the market still doesn’t appreciate. That’s because TPI is making composite chassis for buses. Since electric buses need to shed weight to get more range, the importance of their composite bus business could hit an inflection point once EV buses take off.

Strategy 3

Robo-Taxis and the Rise of Self-Driving

TESLA MOTORS (NASDAQ:TSLA) Market Cap:559.7Bil (Comparison)

The age of self-driving is rapidly approaching. With Tesla reaching beta in its “full self-driving” (FSD) soft- ware and Waymo offering driverless rides across the Phoenix metro, the technology is progressing at a pace most investors have yet to appreciate.

And yet, the grand prize of self-driving might be something many investors aren’t focused on. That is, a future where self-driving cars create a massive fleet of “robo-taxis.” Just consider, ARK Invest estimates the net present value of robo-taxis could reach $11.9 trillion.

Why could robo-taxis become so popular?

Ɋ The combination of EVs and self-driving software could make it much cheaper to call an on-demand robo-taxi than own a car. Today taxis cost an average of $3.50 per mile. Robo-taxis could drive the cost per mile down to $0.25. More importantly, the total cost of driving a personal car is about $0.70 per mile.

Ɋ It’s likely a couple players with large scale will take the bulk of profit in this industry. Just look at how Uber [NYSE: UBER] and Lyft [NASDAQ: LYFT] have become a duopoly in ridesharing today. That means a small number of companies will likely control powerful platforms in this space.

For perspective, $12 trillion is nearly 5× the value of the world’s largest company today, so even if robo-taxis hit a fraction of this estimate, there’s a strong chance this market drives a platform worth trillions.

Now, the growth of the robo-taxi market will likely play out later in the decade, but that doesn’t mean you can’t position your portfolio today. Our recommenda- tion in this space provides stability today but has major- ity ownership in an advanced self-driving car company that’s already running driverless tests in San Francisco and has ambitions to create the largest robo-taxi fleet in the world.

GENERAL MOTORS (NYSE:GM) Market Cap: 79.85Bil (Recommendation Price 55$)

(Shifting to EVs with an inside track to the robo-taxi prize)

In the past year, GM has shown how deeply committed it is to the EV space. First of all, the headline: GM has pledged to only sell vehicles with zero tailpipe emissions by 2035.

Second, it’s not only announcing more EVs such as the Hummer EV but is also working on a joint venture with LG Chem that will give them their own Gigafactory competitor. With the battery being the heart of the electric vehicle (see our next section), controlling battery technology and manufacturing is a critical part of the supply chain.

Third, GM owns a majority ownership in Cruise. With Microsoft [nasdaq: msft] recently investing in Cruise and a partnership with Honda [nyse: hmc] in hand, the company is proving itself to be a leader in the self-driving race. Add its ambitions in the robo-taxi space, and you can see how GM is truly pivoting its business for the next decade of growth.