Companies mentioned in this article: Balqon Corporation (OTCBB: BLQN), A123 Systems Inc. (NASDAQ: AONE) and Enersys (NYSE: ENS).
With the upcoming EVS26 Expo at the Los Angeles Convention Center from May 6th to the 9th 2012 it will be interesting to see what the global electric transportation industry will be presenting. With slow and steady (EV) adoption amongst consumers, and commercial adoption on the rise, many investors will be eyeing both of these sectors. In this article, we’ll take a look at the key differences between the two markets and how investors can profit.
Slow and Steady Consumer Adoption
Plug-in cars accounted for less than one percent of new cars sold in the U.S. this year, but many industry experts believe this is on par with adoption rates for other new technologies. For instance, the adoption rates for personal computers were equally as slow in the beginning before they hit a critical mass.
The question of future demand also remains more uncertain than many care to admit, according to CNET’s Martin LaMonica. In a December 2011 commentary piece, Mr. LaMonica suggested that predicting EV sales is as hard as guessing the price of oil and that many rosy forecasts are over-inflating expectations for EV sales down the road.
In the end, consumer EV adoption is slowly growing, but it could be awhile before it goes mainstream.
Commercial Adoption on the Rise
Commercial EV adoption, driven by environmental concerns and fuel costs, represents a very different story. For instance, many states have banned extended idling for diesel or even gasoline-driven commercial vehicles, the Department of Transportation has promised many new regulations on minimum MPG ratings for commercial vehicles, and the Port of Los Angeles is now taking steps to go green.
The largest hurdle in commercial EV deployment is infrastructure and reliability. Realizing these issues, the Electrification Leadership Council was formed with members including FedEx, Hertz, GE Capital, Navistar, PG&E, Automatiks and others. The hope is to ensure vehicles, infrastructure, and the full network of support services and technologies arrive together.
The current demand for commercial EV’s has helped many companies establish niche applications and realize higher revenues. For instance, Balqon Corporation (OTCBB: BLQN) recently reported revenues that increased 215% to $2,134,331 between 2010 and 2011 in its annual report, while continuing to introduce new technologies, such as its MX30 Class 8 Electric Tractor.
The Takeaway for Investors
With environmental concerns growing, many companies are pursuing plans to rollout EVs in the near-term. And these trends are benefiting those companies that are developing products for commercial end markets.
Companies like Balqon Corporation (OTCBB: BLQN) represent a direct play on this trend, while others like A123 Systems Inc. (NASDAQ: AONE) and Enersys (NYSE: ENS) may represent good opportunities on the battery supply side of the business. Investors can get a closer look by visiting the EVS26 Expo at the Los Angeles Convention Center from May 6th to May 9th 2012, where Balqon will be demonstrating its commercial vehicles and energy storage technologies.
For more information, please visit www.balqon.com. Balqon Corporation’s common stock trades on the OTC Bulletin Board under the symbol “BLQN”. Follow on Twitter @balqon or http://twitter.com/#!/balqon or visit Balqon Facebook page at:http://www.facebook.com/balqoncorporation.