I know it goes against the Hollywood story line, but when David gears up to fight Goliath, the smart money bets on Goliath. And Goliath, in this instance, is General Electric (NYSE: GE ) .
As you probably know by now, American automakers are hawking a new wonder-product to the American consumer: the electric car. It's gonna save the environment, and it'll save us all money at the fuel pump. Global warming? Squelched. Mideast oil? No longer a concern. And on top of everything else, it'll make investors rich -- or so Tesla (Nasdaq: TSLA ) , Ford (NYSE: F ) , and General Motors (NYSE: GM ) would have us believe.
Down here on Main Street, some Fools buy the hype, and others don't. But up on Wall Street, they're going in for the Electric Revolution whole hog. Tiny AeroVironment (Nasdaq: AVAV ) has staked a great deal of its prospects on its ability to help Nissan sell electric Leafs and provide its own charging stations to power 'em. But it's not alone. From even smaller shops such as ECOtality and Coulomb to giants such as Siemens and Eaton (NYSE: ETN ) , many companies believe that the best way to profit from the electric gold rush is not by trying to sell five-figure cars at single-digit profit margins. (Ford gets 5% profits from every revenue dollar, and GM just 1%, while Tesla loses money on every car it sells.)
Why all the enthusiasm for AC/DC fuel pumps? According to The Wall Street Journal, it's because the car-charging market is set to run 1,500% higher, from last year's $69 million in global sales to $1.13 billion in 2013. To hear GE tell it, sales of car chargers will actually outpace sales of electric cars themselves, averaging "2.2 chargers installed for every electric vehicle sold in the first several years" of this market.
And GE's putting its money where its press releases are. Last year, the company made headlines with a billion-dollar-promise to buy 25,000 e-cars over the next few years, and it plans to deploy 35,000 "WattStation" chargers to support the fleet. By way of comparison, if every single Leaf in Nissan's initial production run sells out, and every single customer buys one for his or her garage, that will add up to just 20,000 units sold for AeroVironment. AV has other customers, of course, but its ballyhooed partnership with NRG Energy (NYSE: NRG ) in Texas, for example, will result in just 100 chargers over the next few months.
You can bet on the underdog if you want. But try not to get stomped.
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