Tesla's Reign Is Over

Written by Ryan Stancil
Posted February 3, 2021

Break out the Champagne, start looking for that boat, and get your vacation clothes out of the closet. 

If you’re a shareholder in Tesla, you have every reason to celebrate. Tesla’s stock started 2021 at around $755 and enjoys a price of around $858 as I’m writing this. Beyond that, the company reported that it had its first profitable year. 

Last week, Tesla reported that it earned $721 million in 2020. This stood in contrast to a loss of $862 million in 2019 and came despite a pandemic that crippled auto industry sales. Much of the company’s 2020 success can be pinned on rising sales in China and Europe. In total, 499,550 cars were sold worldwide. Elon Musk, the company’s controversial CEO, thinks the company could sell 800,000 cars in 2021.

Lofty goals, to be sure. But now Tesla faces the same issue any industry darling does. Its competitors will be coming for its crown. 

The Crowded EV Market

What we’re about to see in the electric vehicle (EV) space is something we see in any other market. 

You might remember not that long ago when social media users were losing their minds over a Popeyes chicken sandwich. In the time since, every other noteworthy fast-food franchise has come out with its own version to try to compete. 

You see the same story in areas like technology, entertainment, and countless others. One company leads the way in proving that the market exists, and others eventually come to the table with their own offerings. 

In some cases, those other offerings are more successful. In other cases, they aren’t. The point is that the leader — Tesla, in this case — has to keep a lookout for another company trying to take its spot at the top. 

It’s a story that’s been brewing for years but is sure to ramp up as Tesla cements its lead as the leader in the EV space.

As it stands right now, just about every major car manufacturer offers some kind of alternative-fuel vehicle. The technology has only gotten cheaper since its introduction and thus has become more widely adopted. Slowly but surely, more infrastructure is being added, so people have more places to charge their vehicles. Likewise, the government is taking steps to move the transition to EVs along. As part of his agenda, President Biden wants to convert the government’s entire fleet of vehicles to electric over the next few years. 

It’s a massive job, but it shows just how seriously this is being taken. According to some projections, by the year 2040, EV sales could be nearly 60% of the global auto market. In 2010, electric vehicles had nearly 0% global market share. 

Technological progress moves quickly, and that’s especially true when there is a lot of money on the line. Globally, the auto industry is worth trillions, and that’s only going to grow as the global population does. 

That, plus the fact the governments all over are creating plans to move away from combustion engines, gives car companies incentive to jump into the market. 

So Tesla is enjoying its time in the sun now, but no one can really say how long that will last. It’s very likely that we will be seeing a major shift in the EV market once the big names begin focusing more on electric vehicles. 

The Other Alternative

While electric vehicles get much of the attention when it comes to alternative fuels, they are hardly the only option. Where EVs are challenging combustion engines, hydrogen fuel cells are emerging to challenge electric vehicles. 

It's a niche technology now, but it boasts better efficiency than you find with many EVs. Hydrogen fuel cell vehicles have the advantage or refueling in minutes, rather than hours, and they typically have better ranges than EVs. 

As it stands, the technology is mostly used for commercial vehicles thanks to limited infrastructure. The consumer market is likely to catch on as the technology develops and becomes more widely adopted, just like electric vehicles. 

For investors, the time to get in on this part of the alternative fuel market is now. 

While everyone is clamoring about EVs, hydrogen fuel cell companies are carving a niche that’s showing promise for early adopters. 

One company in particular has a technology that is already seeing a strong level of adoption. And that’s set to grow over the next few years.

Jimmy Mengel has all the details in his newest report.

You can learn all about it and see why this is the right play to make for hydrogen fuel cells. 

Don’t wait too long. Big automakers are targeting Tesla now, but it could only be a matter of time before they begin putting their money behind this technology too. 

Keep your eyes open,

Ryan Stancil
Contributing Editor, Outsider Club

Ryan is an associate editor and regular contributor to Outsider Club. Since 2014, his articles have offered commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments.

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