Some ZETA companies are publicly traded, some remain privately held. Are any of them worth investing in?
On December 21, Tesla will be added to the S&P 500 before the market open, becoming the sixth most valuable company in the index and sparking a flurry of buying and selling as institutional investors rebalance their portfolios. But what will happen next?
If historic patterns hold true, TSLA will underperform the index in the following year. And that makes sense; the stock has already gained 40% since the announcement on November 16 that it would be added to the index.
Thus, I don’t recommend buying TSLA now—though I do recommend holding it, particularly if you’ve got big long-term profits like some of my readers.
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For the record, I first recommended TSLA to them in December 2011. And I bought a Tesla myself in 2013. The stock is up more than 9,000% since that recommendation. And my car is still going strong. So I know Tesla. But I think the best investment opportunities today are in companies that aren’t so famous!
For example, just last month, 28 companies, both public and private, joined forces to create ZETA, the Zero Emission Transportation Association.
What is ZETA?
The aim of this association: to push for 100% electric vehicle sales in the U.S. by 2030.
That’s an ambitious goal, to be sure. But as Tesla’s Elon Musk has shown, ambitious goals can be achieved, particularly when they bring progress. And in this case, it helps that they align (roughly) with the interests of the political party in power.
ZETA’s individual goals include:
- Outcome-driven consumer EV incentives. These include point-of-sale consumer incentives to buy electric and incentives to retire gasoline-powered cars early.
- Emissions/performance standards enabling full electrification by 2030. Emission targets have long been an effective legislative tool; they’re well understood by consumers and they enable markets to find solutions.
- Infrastructure investments. This would be mainly federal investment in charging infrastructure.
- Domestic manufacturing. For the jobs, obviously.
Now, some of these companies in ZETA are private, so you can’t invest in them yet, and some of them are big stodgy utilities, only attractive if you’re looking for dividends, but a handful have great potential to thrive as ZETA work towards its goal—and even to become the next Tesla!
So let’s take a look at the list.
The 28 ZETA Companies
ABB (ABB) — Formerly known as ASEA Brown Bovieri and based in Switzerland, the company is a global leader in the power business and related technologies, with roughly 110,000 employees in more than 100 countries. It pays a 2.5% dividend, but it’s not growing.
Albemarle Corporation (ALB) — Based in North Carolina., it’s the world’s largest producer of lithium, and its stock is strong!
Arrival— Based in the U.K. and bankrolled by Hyundai and Kia, Arrival is preparing to manufacture commercial electric vans and busses—and to go public soon via a SPAC.
ChargePoint — Not yet public, but working on it, California-based ChargePoint provides access to a network of over 100,000 electric vehicle chargers in 14 countries with an integrated suite of hardware and software. I’ve used ChargePoint numerous times.
Consolidated Edison (ED) - The big New York, New Jersey and Pennsylvania electric utility, ConEd is not really growing but its dividend is 4.1%.
Copper Development Association — A trade association of the copper industry, it aims to influence policy, not make money.
Duke Energy (DUK) — Based in North Carolina, it’s a big electric utility, not really growing, but you get a dividend of 4.1%.
Edison International (EIX) — Another electric utility, based in California, it’s also not really growing but it also pays a dividend of 4.1%.
Enel X — Based in Rome and operating globally, the privately held company, previously known as EnerNOC, is focused on applying solutions resulting from digital transformation to the energy sector (like charging stations). From my brief research, I’d say it appears to be the opposite of Tesla from a management perspective, with no real leader and a plethora of committees.
EVBox — Based in Amsterdam this privately held company operates a network of more than 150,000 charging stations across more than 70 countries and appears to be growing fast.
EVgo — Based in New York (and a division of LS Power), this privately held company is focused on providing fast chargers to the public market; it currently operates more than 800 in 34 states. I’ve used its slower Level 2 EVgo chargers, but it’s been a few years.
Ioneer — Not yet in operation, this mining and development company plans to extract lithium carbonate and boric acid from its mine in Nevada and become a globally significant source of both lithium and boron.
Li-Cycle — Based in Ontario, this privately held company is the largest lithium-ion battery recycler in North America—and growing.
Lordstown Motors (RIDE) — With a market cap of $4 billion, Lordstown is far from Tesla territory, but it has good potential as management plans to use the old GM factory in Lordstown, Ohio to build light duty electric trucks for fleet owners, emphasizing the lower maintenance costs of electric vehicles. The stock is strong.
Lucid Motors — Based in California, privately held Lucid is targeting Tesla’s flagship Model S sedan with its high performance Lucid Air sedan and the early results are very impressive, with a price, $69,900, that’s close to Tesla’s. You can’t buy one yet, but you can pre-order a vehicle to be built at the company’s just-completed factory in Arizona.
Piedmont Lithium — Based in North Carolina, this privately held company is focused on the development of its mine—in an area where two major lithium mines operated from the 1950s to the 1990s.
PG&E Corporation (PCG) — San Francisco-based Pacific Gas & Electric is still growing, but it isn’t currently paying a dividend; a judge ruled that the company should use the money to cut down trees instead (to reduce fire risk).
Proterra — Based in California, this privately held company has sold more than 1,000 electric buses over the past decade to more than 45 customers in over 20 states, but the competition is now heating up.
Redwood Materials – Headquartered in Nevada, and led by Tesla co-founder JB Straubel, Redwood has big plans to tackle (and profit from) the imminent challenge of recycling millions of batteries.
Rivian — Bankrolled by nearly $3 billion invested by the likes of Ford, T.Rowe Price and Amazon (which has ordered 10,000 electric vans), Rivian is based in California, but has a manufacturing plant in Illinois, where it will make expensive (starting at $67,5000) pickup trucks and SUVs. You can pre-order now.
Siemens — The German power generation and transmission giant isn’t growing but it has a yield of 3.6%.
Southern Company (SO) —Based in Atlanta, this utility is actually still growing, and it yields 4.2%—so if you’re going to invest in one of these utilities, this is the one.
SRP — Shorthand for Salt River Project, it’s the electrical utility for the Phoenix Metropolitan area, and it’s pushed hard for electrification of its own fleet of vehicles in recent years.
Tesla — The king of the hill today, Tesla is not only the leading producer of electric cars globally, it also has the best network for charging during long-distance travel (as long as you’re driving a Tesla), a growing solar power division, a growing battery operation, and plans to break into the semi truck market. But with a market capitalization of $550 billion, a very high profile thanks to the S&P 500 inclusion, and a YTD gain of well over 500%, it’s due for a rest.
Vistra (VST) — This Texas utility is still growing, and it yields 2.9%.
Volta — An investment company focused on battery and energy storage innovation, this Illinois organization excels at enabling cross-sector collaboration among a variety of stakeholders.
Uber (UBER) — As Uber grows, experts expect its services (delivering both people and meals) to increasingly be provided by electric cars, and eventually self-driving cars—and its stock is strong!
WAVE — An acronym of Wireless Advanced Vehicle Electrification, this company embeds inductive power transfer pads in roadways, so vehicles can recharge on the move. Today it has commercial deployments in six locations.
All told, this list of ZETA members is impressive, representing companies large and small, all of whom should benefit as battery-powered vehicles go increasingly mainstream and eventually account for the majority of vehicles sold. As for investments, among the public companies in the group, the best investments today for investors looking for big long-term gains look like Albemarle (ALB), Lordstown Motors (RIDE) and Uber (UBER).
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