Vehicles based on green energy have few takers because of large associated costs. Yet, governments across the world are trying to push for increased usage of alternative energy sources in the automotive sector.
Given this scenario, do green energy stocks (particularly those related to the automotive sector) have the potential to become profitable investments in future? Let's see.
There are several reasons why alternative energy companies can rule the roost in the automotive industry in the years to come. According to a report from the Intergovernmental Panel on Climate Change, 77% of the world's energy could come from renewable energy sources by 2050. In the automotive sector, consumers also appear increasingly willing to make a move toward alternative energy sources as the cost of oil increases.
Fuel cells on the rise
Biofuels also figure in the list of measures taken to reduce greenhouse gas emissions from vehicles. With growing demand for fuels other than the ones from fossil sources, biofuel should pick up the pace in the automotive world. Producers of biofuel in the U.S. include BioFuel Energy
Another company that looks lucrative in the biofuel space is Codexis
In an earlier article, I discussed how electric vehicles from companies like Tesla Motors
Greener in the long run
The automotive industry is on its way to a massive overhaul of the technology it drives on. While concerns regarding greenhouse emissions hound governments across the globe, consumers are worried about rising gasoline prices. The race to find alternatives to the traditional fossil fuel technology is on hyperdrive.
The bottom line
The stocks I mentioned above have the potential to grow with the expansion and development of the alternative energy market for automobiles. In the technology sector, the crucial first mover advantage sometimes determines the winners. But it is still the long run, where the stability of these companies is really put to the acid test. These companies are the early players in a market that is still in its infancy. There is lot more ground that remains to be covered. It will take time before these stocks stabilize. As the attempt to install green, clean energy in our daily lives continues to take off, these stocks are sure to become winners. But as of now, you could start small here in order to cash in on them in the long run.
Arunava Dedoes not own shares of the companies mentioned in this article. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended Pfizer and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.