Have you been to a gas station recently? Noticed the sky-high gas prices? Across the U.S., the average price of a gallon of gasoline has leapt to an all-time high of over $4. And while you might be balking at — and hurting from — those ridiculously high prices, let me tell you how you can make money off of them: Buy electric vehicle stocks.
The logic here is simple, and it’s backed by data.
Historically, soaring gas prices have promoted the healthy adoption of EVs. And it checks out, right? The more money you’re shelling out at the pump every time you refuel, the more time you spend thinking: “Man, maybe I should get an electric vehicle.” And the more time you spend thinking that, the more likely you are to finally make the switch and buy an EV.
It makes sense, but the quantitative correlation here is way stronger than you may think…
Throughout 2017 and 2018, U.S. gas prices rose modestly, and global EV unit sales grew about 60% in each of those years. Then, in 2019, retail gas prices started to drop, coinciding with a major slowdown in EV sales growth to just ~10%. Gas prices stayed low and bounced around throughout 2020, coinciding with a ~40% rise in EV sales. And then as prices jumped in 2021, EV sales did, too — by a record 93%.
The correlation here is clear and strong. The higher gas prices go, the more consumers buy EVs instead of gas-powered cars.
Well, in 2022, gas prices are soaring to record highs and likely won’t come down anytime soon since the U.S. just officially banned all Russian energy imports.
History shows this should lead to a surge in EV sales in 2022. And that’s exactly what will happen.
Myriad EV Options in 2022
Soaring gas prices will be just one of many factors that will spark enormous growth in EV stocks in 2022.
Another, arguably more important factor is the increase in EV options this year.
If you were looking to buy an EV in 2020 or ‘21, you didn’t have too many options. There was Tesla (NASDAQ:TSLA), Toyota (NYSE:TM) Prius, maybe a few other choices. But by and large, your selection was limited.
In 2022, that selection is going to expand like never before.
Ford (NYSE:F) is launching its electric F-150 pick-up truck. Mercedes-Benz plans to introduce three new EV models. BMW (OTCMKTS:BMWYY) is coming to market with two new EVs. Cadillac is launching the electric Lyric. Nissan (OTCMKTS:NSANY) has the Ariya. Toyota has the bZ4x, and Subaru has the Solterra. Volvo plans to release two new electric models. Volkswagen (OTCMKTS:VWAGY) is out there with the ID.4. Lexus plans to debut the Lexus RZ. Kia (OTCMKTS:KIMTF) has the EV6 coming to market, and Hyundai (OTCMKTS:HYMTF) is launching two new Ioniq models.
Opportunity Lies in Non-Legacy EV Stocks
And then there’s all the “new” car brands. Lucid (NASDAQ:LCID) is rolling out its cars. Rivian (NASDAQ:RIVN) is releasing its trucks. Canoo (NASDAQ:GOEV) is launching its Lifestyle Vans. Fisker (NYSE:FSR) plans to deliver its Ocean SUV, and Polestar has plans for a 2022 launch as well.
You get the point.
The number of EV models available for purchase by consumers is going to dramatically increase in 2022. In fact, this will be an exponential jump. Over the past five years, the number of new EVs introduced into the U.S. market has numbered around five to 10 models per year. In 2022, that number is expected to jump to 38, marking an exponential 61% year-over-year jump in total EV models available in the U.S.
More options will likely lead to more buyers, especially since those options are – by and large – coming from legacy automakers that have strong brand equity and a long list of previous buyers.
Oh, and let’s not forget many of these models will be cheaper than anything the EV industry has seen before.
EV Prices Will Plummet in 2022
One of the biggest hurdles to buying an EV has been their price point. They are, quite simply, very expensive. In January 2021, the average transaction price of a new EV was about $63,000, while the average transaction price for all new cars was just $46,000.
However, EV prices are set to plummet in 2022 because of those 38 new models coming to market, many are debuting at never-before-seen, ultra-low prices.
Canoo is starting its Lifestyle Van around $35,000. Fisker is releasing the Ocean SUV at just $37,500. Hyundai’s Ioniq models will start around $43,000. The Ford F-1 Lightning pick-up truck will start at $40,000. Kia’s EV6 be $41,000, while the Nissan Ariya will start at $47,000 and the Subaru Solterra at $40,000. The Toyota bZ4x, meanwhile, will likely start at $36,000.
Those are ultra-low prices. We’ve never seen costs that low on such a wide variety of high-quality EVs.
Indeed, per our rough analysis of the projected and announced starting prices of new EV models in 2022, we believe that the average price of EVs could fall by about 20% this year!
So not only are gas prices soaring, but a bunch of new EV models are launching this year concurrent to that gas-price spike. And a bulk of those models are debuting at ultra-low, never-before-seen prices.
It doesn’t take a rocket scientist to connect these dots.
The EV Revolution is about to kick into overdrive in 2022, and certain EV stocks are going to absolutely soar!
Making Big Gains With EV Stocks
When it comes to the EV Revolution, you may think that the Tesla stock price surge has already happened and that the game is over.
But that couldn’t be farther from the truth.
As the 1970s rock band Bachman-Turner Overdrive once said in a song: “You ain’t seen nothing yet.”
The EV Revolution will go parabolic in 2022. This was already going to happen before the price of gas climbed to unbearable levels, thanks to all the new, affordable EV models launching this year. But with gas now surging to record highs, the growth we are about to see across the EV industry will be jaw-dropping.
Folks, 2022 will go down in history as the year that EVs went mainstream.
The only question will be: Where were you when that happened?
Are you going to get in on this history in the making and potentially profit big in EV stocks in 2022? Or are you going to be stuck on the outside and watch your wealth get eaten by inflation?
The choice is yours – and the answer is pretty obvious.
Originally published on InvestorPlace.com
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.