China Disrupts Transportation With EVs, Buses and Scooters

David Fessler By David Fessler
Energy and Infrastructure Strategist

Alternative Energy

Eleven years ago, I started researching and writing about all things renewable energy. Solar panel companies were sprouting like weeds.

And a new electric vehicle company by the name of Tesla (Nasdaq: TSLA) was making a sleek little roadster that ran on electrons instead of fossil fuel molecules.

The world barely noticed… but it’s noticing now.

Nearly every car and truck manufacturer in the world has EV models either for sale now or coming in the next year or two.

Even more incredible, entire countries are banning future sales of fossil fuel-powered vehicles.

And China is leading the switch.

A Chinese EV company just debuted on the New York Stock Exchange, and a few weeks ago a Chinese scooter company raised $150 million in an IPO.

More on those in a moment.

The Wheels on the Bus… Are Silent

I believe you’ll have a tough time finding a diesel bus in any Chinese city in a decade or two. It’s electrifying them all. (Keep in mind that China has more than 160 cities with a population of 1 million-plus people; the U.S. has 10.)

Chinese cities, choking on pollution from diesel bus fumes, are rapidly switching to electric buses. Approximately 99% of the estimated 385,000 all-electric buses in the world are in China.

Shenzhen, a city of 12 million people, started buying electric buses back in 2009.

Its fleet of 16,359 buses is now 100% electric. And China continues to add 9,500 new electric buses to its city fleets every five weeks.

But China is not just electrifying buses. When it comes to EVs, China is racing ahead.

The rest of the world is barely getting out of the starting gate…

In 2017, Chinese EV manufacturers made 595,000 of the 1.1 million EVs made worldwide.

Back in September, Chinese EV company NIO (NYSE: NIO) debuted on the NYSE.

NIO has a market cap of $6.5 billion, according to Bloomberg. Its first EV for the masses, the ES8, is a high-performance, seven-seat SUV.

It began ES8 deliveries in June 2018. NIO plans to launch a five-seat SUV, the ES6, later this year.

Not to mention China’s electric scooter and motorcycle market should exceed $12 billion by 2025.

Just a few weeks ago, Niu Technologies (Nasdaq: NIU), a Chinese scooter company, raised $150 million in an IPO.

This is a company you’ll want to keep an eye on.

You see, scooters make a lot of sense for China’s urban dwellers. They can be parked in small spaces, and their battery packs are removable and can be charged from a home wall socket.

They can easily move through China’s congested city streets. And they don’t need a long range either. Just one trip back and forth to work is adequate for most buyers.

Ready or Not, Here It Comes

It’s clear that the road to 100% renewable energy isn’t just feasible. It’s turning out to be the safest and cheapest option.

But I’m a realist. This transformation isn’t going to take place over the next year… or even the next decade.

But it is happening. And the rate of change is rapidly increasing.

Is there still money to be made in oil and gas? You bet.

I have a number of them recommended in the portfolios I manage. But real money is also going to be made in companies that are on the cusp of a disruption…

Companies like NIO and Niu Technologies.

Good investing,

Dave