2 Stocks for the Death of the Combustion Engine


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2 Stocks for the Death of the Combustion Engine

True believers in Tesla (Nasdaq: TSLA) became even more enthused last week. That’s when rumors began circulating that it was nearing a deal to begin producing cars in China for the local market.

However, I thought another item out of China was more newsworthy.

Swedish carmaker Volvo, which is owned by the parent of Chinese automaker Geely Automobile Holdings (OTC: GELYY), took square aim at Tesla with its premium Polestar brand. This newly spun-out division will focus on high-performance electric cars with a long-range.

The first Polestar vehicle, launching in early 2019, will be a plug-in hybrid. But the second model – the Polestar2 – is targeted to compete directly against Tesla’s Model 3. The third planned model will be an all-electric SUV.

Volvo says it will produce tens of thousands of the Polestar2 in a jab at Tesla’s well-known production problems. Elon Musk recently said that Tesla’s Model 3 is “deep in production hell.”

The move from Volvo is significant because the future of the automobile industry is in China, which is already the largest and most profitable vehicle market in the world. And, I might add, the largest market for electric vehicle sales.

And it’s these two stocks that will be the biggest winners.

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