5 Stocks Cashing In as $100 Oil Pushes Drivers Toward Electric

With gasoline prices exceeding $4.40 per gallon in the U.S. in September, and Brent crude oil soaring above $100 a barrel since early September, drivers have responded as expected. U.S. hybrid sales grew by 24% in the third quarter, while battery-electric registrations jumped by 52% across Europe in August. The International Energy Agency projects that EVs will account for nearly 30% of global car sales this year.

This surge in EV interest should have been a boon for the electrification industry, but a Bloomberg gauge of 104 EV-linked companies has fallen 1% for the year, dragged down by Tesla and BYD. Even Albemarle, the largest U.S. lithium producer, fell to $102.75 on October 7, less than half its 52-week high. The oil shock's funds have been selective in their investments, favoring unconventional players.

Honda, once considered a victim of the EV transition, is now reaping the benefits. The Japanese automaker canceled more than $9 billion in costs to discontinue its EV plans and posted its first annual loss in nearly 70 years. However, Honda swiftly shifted its focus to hybrids, with plans for 15 new hybrid models by 2030, particularly in North America.

Consequently, hybrid sales in the U.S. surged to over 106,000 units in the third quarter, making up 53% of CR-V sales. Honda's operating profit more than doubled to 530.8 billion in the April-to-June quarter, setting a record for the company. Although Honda still anticipates around 520 billion in restructuring costs this year, investors have responded positively, sending the company's ADRs up more than 7% in May when Honda's guidance surpassed expectations.

ChargePoint, once a gloomy indicator for EV charging investments, recently turned a corner. After reporting robust revenues and a reduced loss in its September earnings call, the stock surged more than 70% the following day. The company attributed its success to the surge in U.S. gas prices, driving consumer purchasing decisions.

Although ChargePoint still loses money and has limited cash reserves, its stock price has declined since the earnings report. SolarEdge, an inverter and home battery manufacturer, has been highly sensitive to the energy transition's volatility. Although its European revenue more than doubled in the second quarter, spurred by households purchasing solar panels ahead of anticipated electricity price hikes and adding batteries as several major markets phase out net metering, the stock fell by 24.6% in a single session after its second-quarter report.

The company's shares have since plummeted to less than half their spring value, reflecting its investors' uncertainty. Eaton Corp., a power management giant, stands out among the EV-related firms listed here. The company's sales reached a record $8.5 billion in the second quarter, growing by 21%, with a 41% increase in orders for its Electrical Americas business on a 12-month rolling basis.

Its stock price reached a new 52-week high after the report. While most of the growth stems from AI data centers, Eaton also plays a role in electrification-related projects.