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It’s time for a reckoning…
That is when the rubber meets the highway — proving whether or not analysts’ analysis was heading in the right direction … or missed the mark.
And for electrical autos (EVs) … it missed it by a mile. Have a look:
The primary wave of EV consumers (myself included) has come and gone.
Gross sales are decrease. Costs are plunging.
The federal government can’t even sway again consumers with its new $7,500 EV incentive proper off the highest.
Now carmakers have to rethink the right way to transfer past the early adopter market.
Tesla has already minimize costs half a dozen occasions this yr, and its Mannequin 3 now prices roughly $40,000 — lower than the common automotive value.
Ford was going to supply 600,000 EVs yearly by the tip of this yr… They’ve moved that to late 2024.
Ford reported that it’ll lose $4.5 billion on EV manufacturing — greater than $60,000 per electrical automobile!
Hyundai Motor doesn’t qualify for U.S. tax credit since its EVs are made outdoors the U.S.
So that they’re getting artistic … throwing in free house chargers and discounted installations. Perhaps a complimentary air freshener will persuade them.
However automotive consumers aren’t taking the bait.
And that is proper on observe with what I’ve been saying.
The REAL mega development establishing for an enormous run in 2024 is just not EVs… It’s oil.
Step Again from EVs…
Wait … all of the headlines learn: EVs Will Kill Fossil Fuels
What occurred??
Properly, beneath the headlines, I advised you that inexperienced vitality is a crock of crap.
To make a battery for an EV, it is advisable to dig up 500,000 kilos of filth. That’s the one approach to get the minerals and metals you want — comparable to lithium, cobalt and graphite.
All that earth must be hauled away with dump vans — just like the CAT 797.
Simply considered one of these ginormous autos drinks 235,000 gallons of diesel gas every year — and accounts for as much as half of a mine’s vitality utilization.
So whereas we dig up supplies for EV batteries, hoping to interchange gas-fueled vehicles, every dump truck will deplete as a lot gas as 423 passenger vehicles.
And that solely scratches the floor.
The underside line: We wager the farm on “inexperienced/clear” vitality. However the fact is: Fossil gas is right here to remain for the subsequent decade … a minimum of.
In truth, we’re establishing for the proper one-two punch for potential earnings.
Punch 1:
In its September “Quick-Time period Power Outlook” … the U.S. Power Info Administration (EIA) acknowledged:
“World oil inventories [will] decline by virtually a half million barrels per day … inflicting oil costs to rise… Brent crude oil value will common $93 per barrel within the fourth quarter of this yr.”
Simply as I’ve been saying all alongside — provide and demand will maintain oil costs heading increased.
However I imagine costs may push well beyond EIA estimates, due to the affect of…
Punch 2:
Winter is coming.
Colder temps imply hotter homes. Meaning extra oil.
It’s the proper mixture for launching oil costs considerably increased…
And right here’s ANOTHER kicker…
I can share all my analysis with you. However there’s one sign that’s flashing like a siren proper now.
Acquisitions are occurring…
Oil firms are educated consumers. If you begin to see giant oil firms purchase different smaller oil firms, it tells me this…
It’s cheaper to purchase oil firms and their reserves than to drill for oil.
There was discuss earlier this yr that Chevron was seeking to purchase Occidental Petroleum.
And previously week, two acquisitions happened:
Boone Pickens, one of many nice oil tycoons, discovered that to be true again within the early Nineteen Eighties when he stated: “It’s cheaper to search for oil on the New York Inventory Alternate than it’s to drill immediately.”
And that’s what I’m seeing proper now.
If you happen to don’t have oil and fuel firms in your portfolio, you’re lacking out big-time.
I’ve been saying that for the final yr and a half… Ever since I wrote about it in my Alpha Investor e-newsletter in April 2022…
Fossil fuels would be the huge winners — not simply in 2024, however for the subsequent decade!
What do you assume? (<< Click on to let me know!)
Regards,
Charles Mizrahi
Founder, Alpha Investor
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