Electric Cars Look Like They are for Real at the Detroit Car Show

The expectant air at this week's Detroit Auto Show bodes of increased sales, innovative products and a resurgent auto industry in the United States. This year the electric car concept is center stage and in the midst of all the excitement, the new electric Chevy Volt has been named Car of the Year.  The Volt has been hyped for a few years now and was talked about a lot in the Fall of 2008 in front of Congress as GM execs tried to show why the car would be important for the future and therefore why a bailout was warranted.

Two years later the Volt has finally appeared along with Nissan's electric Leaf. The pair already has plenty of competition right on their heels. At Detroit, the new electric car launch pad has been cranked up by a factor of three or more, and perhaps most notable was Ford as it announced the new electric Focus due later this year. In addition, Ford said it was only the first of a line of autos and vans targeting a full spectrum of uses and different energy efficient power configurations. 

The new electric Focus stands out because its marketing and features make electric for the first time look both practical and potentially mainstream. First it has double the range, 100 miles, on batteries as the Volt and won't need a backup gas motor. Ford has hinted it will sell for a lot less than a Volt too. It will be a lot easier to keep running as it will only take 4 hours to recharge it on its special charging unit that is kept in the garage and $3.60 of electricity will move you 100 miles. The charger will be sold at Best Buy for a reasonable price and uses Microsoft software to work at night when rates are lower. Co-branding and appeals to the American suburban lifestyle are at work here as well. 

Attractive and well marketed, costing only 3.6 cents/ mile to operate vs.more than 10 cents/mile for the gas version, having adequate daily range, it seems the new Focus is at or near the threshold of real sales success in the mass market. If that is the case,  electric cars like the Focus cars can pave the way for the United States to finally reclaim its own energy destiny by freeing itself from the use of imported energy.

Electricity has other benefits. Electric cars will be cleaner, quieter and run on domestically produced energy, but by what power plants? The greater electricity demand that electric cars will require will mostly have to come from new, probably nuclear power plants since they are the only mass scale, 24/7 and clean energy option we really have.

The Investment Themes Here are Powerful but Somewhat Longer Term.

Ford Motor Company's successes since 2007 have brought the stock a long way. But with success now seeming likely in the electric car niche as well, is the market ready for a really new era at Ford? I think we are seeing shows that the company will probably do much more than reclaim its previous market share. It seems to be positioning itself now to become the largest car company in America and maybe the world. 

As electric car demand ramps up, the demand for the electrical components, batteries, electronic controllers and minerals required to produce these cars will bring a lot of business to the relevant companies and industries.

Nuclear energy will be ramped up and have to be fast tracked to meet the extra demand over a similar time frame. On top of that, whatever growth in the nuclear power industry that is taking place in the United States is a fraction of the growth that is happening overseas, especially in the emerging economies. This looks like a great industry over at least the next 15 years or more. Look at nuclear construction companies and uranium miners. .