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Prices of EVs Are Falling — Time to Buy Oil?

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It’s time for a reckoning…

This is when the rubber meets the road — proving whether analysts’ research was on target … or missed the mark.

And for electric vehicles (EVs) … it missed it by a mile. Take a look:

The first wave of EV buyers (myself included) has come and gone.

Sales are lower. Prices are plunging.

The government can’t even sway back buyers with its new $7,500 EV incentive right off the top.

Now carmakers need to rethink how to move beyond the early adopter market.

Tesla has already cut prices half a dozen times this year, and its Model 3 now costs roughly $40,000 — less than the average car price.

Ford was going to produce 600,000 EVs annually by the end of this year… They’ve moved that to late 2024.

Ford reported that it will lose $4.5 billion on EV production — more than $60,000 per electric vehicle!

Hyundai Motor doesn’t qualify for U.S. tax credits since its EVs are made outside the U.S.

So they’re getting creative … throwing in free home chargers and discounted installations. Maybe a complimentary air freshener will convince them.

But car buyers aren’t taking the bait.

And this is right on track with what I’ve been saying.

The REAL mega trend setting up for a massive run in 2024 is not EVs… It’s oil.

Step Back from EVs…

Wait … all the headlines read: EVs Will Kill Fossil Fuels

What happened??

Well, beneath the headlines, I told you that green energy is a crock of crap.

To make a battery for an EV, you need to dig up 500,000 pounds of dirt. That’s the only way to get the minerals and metals you need — such as lithium, cobalt and graphite.

All that earth needs to be hauled away with dump trucks — like the CAT 797.

Just one of these ginormous vehicles drinks 235,000 gallons of diesel fuel each year — and accounts for up to half of a mine’s energy usage.

So while we dig up materials for EV batteries, hoping to replace gas-fueled cars, each dump truck will burn up as much fuel as 423 passenger cars.

And that only scratches the surface.

The bottom line: We bet the farm on “green/clean” energy. But the truth is: Fossil fuel is here to stay for the next decade … at least.

In fact, we’re setting up for the perfect one-two punch for potential profits.

Punch 1:

In its September “Short-Term Energy Outlook” … the U.S. Energy Information Administration (EIA) stated:

“Global oil inventories [will] decline by almost a half million barrels per day … causing oil prices to rise… Brent crude oil price will average $93 per barrel in the fourth quarter of this year.”

Just as I’ve been saying all along — supply and demand will keep oil prices heading higher.

But I believe prices could push way past EIA estimates, thanks to the impact of…

Punch 2:

Winter is coming.

Colder temps mean warmer houses. That means more oil.

It’s the perfect combination for launching oil prices significantly higher…

And here’s ANOTHER kicker…

I can share all my research with you. But there’s one signal that’s flashing like a siren right now.

Acquisitions are happening…

Oil companies are knowledgeable buyers. When you start to see large oil companies buy other smaller oil companies, it tells me this…

It’s cheaper to buy oil companies and their reserves than to drill for oil.

There was talk earlier this year that Chevron was looking to acquire Occidental Petroleum.

And in the past week, two acquisitions took place:

Boone Pickens, one of the great oil tycoons, found that to be true back in the early 1980s when he said: “It is cheaper to look for oil on the New York Stock Exchange than it is to drill directly.”

And that’s what I’m seeing right now.

If you don’t have oil and gas companies in your portfolio, you are missing out big-time.

I’ve been saying that for the last year and a half… Ever since I wrote about it in my Alpha Investor newsletter in April 2022…

Fossil fuels will be the big winners — not just in 2024, but for the next decade!

What do you think? (<< Click to let me know!) 

Regards,

Charles Mizrahi
Founder, Alpha Investor

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