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Fidelity's Select Automotive Portfolio (FSAVX) - Get Fidelity Select Automotive Report has seen a 106.47% rise year to date as the auto industry soars from the depths of the downturn.A $2 billion-dollar extension for the "Cash for Clunkers" bill was passed today in the Senate. This government stimulus program has helped fuel auto sales in recent weeks and underscore the recovery of the industry in recent months.

The largest component in FSAVX' portfolio,

Johnson Controls

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, is grabbing some stimulus of its own. Johnson announced yesterday that it has been awarded a $299 million grant by the U.S. Department of Energy under the American Recovery and Reinvestment Act (ARRA) to build domestic manufacturing capacity for advanced batteries for hybrid and electric vehicles.

This government stimulus will aid plans that Johnson had already put into place. The funding will make up approximately half of the $600 million that Johnson had planned to spend in domestic advanced battery manufacturing capacity and infrastructure development.

Warren Buffett has also reaped success from the battery business in recent months. Bloomberg reported on July 31 that

Berkshire Hathaway

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earned more than $1 billion in profit with its investment in Chinese car company


, which is China's largest producer of rechargeable batteries. The batteries made by the firm are supplied to a number of mobile phone companies, including


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. (See

"Professor Buffett's Chinese Lesson: Foreign Cars Pay."


Adding to the stimulus handed out to car companies and manufacturers has been the Cash for Clunkers success. Senate Majority Leader Harry Reid (D., Nev.) has said that Democrats have enough votes to pass the Cash for Clunkers extension in the wake of negotiations between Democratic and Republican lawmakers. Reid expects that the extension will help consumers to keep trading in their cars until Labor Day.

Investors should remember that the Cash for Clunkers dollars are not the only funds being funneled into the auto industry. As government stimulus money is allocated to firms like Johnson, FSAVX could continue its incredible trajectory. President Barack Obama recently announced $2.4 billion in stimulus grants for the electric-vehicle industry -- money that could help to propel funds like FSAVX in the long term.

At the time of publication, Dion was long FSAVX.

Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.