Could new Formula E races help galvanize electric car stocks?

By Ben Levine for Kapitall.

Late in 2012 the Fédération Internationale de l’Automobile (FIA), the group that brought us Formula One racing, announced a new class of auto racing: the new Formula E Championship, which will feature only electrically powered racing cars. 

The races will begin in September and, like Formula One, the new championship will feature races in cities all around the world.

Confirmed race locations include Beijing (putting some relics of the 2008 Olympic Games to some use, such as the neglected  Bird’s Nest stadium), Buenos Aires, Miami, Los Angeles, Berlin and London.

And the Championship is still adding locations—Formula E is in talks with the city of New York about the possibility of a race through The Big Apple.  

In 2013 the Formula One event had total television viewership of 450 million people for the entire tour. That isn't as good as the 700 million people who watched the 2012 World Cup finale, but it's still 40 times larger than the TV audience for this year's Olympic Closing Ceremony. 

Both benchmarks are probably a ways off for Formula E. Its chief executive, Alejandro Agag, forecast a total viewership of just over 205 million people in its first year. While this would constitute less than half of the viewership of Formula One, which began in 1950, it’s only reasonable that the new electric-only race would need some time to gain popularity.

This kind of viewership could provide advertising opportunities for car companies seeking to promote electric or hybrid vehicles, like Nissan and Tesla (TSLA) who dominated electric car market share for the first half of 2013 (at 45.7% and 42%, respectively). 

Toyota (TM) could also potentially see a boost, considering their similar dominance of the  hybrid vehicles, with a 68.05% share of the market.

Though these are the biggest players, Ford (F) trailed behind in both markets, making up 4.1% of the first half of 2013’s electric car market share and 15.65% of April’s hybrid car market share. 

Do you think the races could help out companies that produce electricity-powered cars and their parts? Take a look at the list below to decide for yourself.

Click on the interactive chart to view data over time. 

1. Honda Motor Co., Ltd. ( HMC, Earnings, Analysts, Financials): Engages in the development, manufacture, and distribution of motorcycles, automobiles, and power products primarily in North America, Europe, and Asia. Market cap at $65.1B, most recent closing price at $36.12.

 

 

2. Tesla Motors, Inc. ( TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $26.73B, most recent closing price at $217.65.

 

 

3. Toyota Motor Corporation ( TM, Earnings, Analysts, Financials): Engages in the design, manufacture, assembly, and sale of passenger cars, minivans, and commercial vehicles. Market cap at $184.08B, most recent closing price at $116.17.

 

 

4. General Motors Company ( GM, Earnings, Analysts, Financials): Operates as a global automaker. Market cap at $50.91B, most recent closing price at $36.55.

 

 

5. Ford Motor Co. ( F, Earnings, Analysts, Financials): Develops, manufactures, distributes, and services vehicles and parts worldwide. Market cap at $59.84B, most recent closing price at $15.18.

 

(List compiled by Ben Levine. Monthly returns sourced from Zacks Investment Research, all other data sourced from Finviz.)

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

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