Barry Armstrong
Founder and President, Armstrong Advisory Group

Steven Spielberg’s film Back to the Future II predicted the recent technological developments in our world with pretty impressive accuracy. In 2015, Lexus created a prototype of the hoverboard. Video calls take place across the globe today thanks to widely available programs such as Facetime and Skype. The film even predicted that the Chicago Cubs would win their first World Series championship in over a century. However, the one prediction in Back to the Future II that has not yet come to pass is the advent of the flying car. Although we are still waiting for the release of this technology, we are able to experience the modern evolution of the motor vehicle in the way of electric cars.

The people who listen to my radio program on a daily basis know all about my affinity for electric cars. I certainly enjoy driving them, but I also believe them to be a wise purchase. Earlier this year, I purchased a brand new Chevrolet Volt valued at $32,500. After factoring in the value from a trade-in, I ultimately paid just over $20,000 for the vehicle. Due to the fact that the Volt is a plug-in hybrid, I qualify for a $7,500 federal tax credit as a result of my vehicle purchase. Although electric vehicle tax credits will eventually run out, they remain a strong incentive for consumers.

According to Bloomberg1, only 102,600 electric vehicles were sold in the United States in 2015. However, sales growth for electric vehicles is expected to grow: a NASDAQ report2 from March of 2016 speculates that the rate of electric vehicle sales in the United States may spike to as many as 740,000 units sold annually by the year 2024. A Bloomberg New Energy Finance report3 from February of 2016 which highlights the potential sales growth within the electric vehicle industry notes that global electric vehicle sales will reach the 41 million mark by 2040, representing 35% of new light-duty vehicle sales. To further emphasize the growth potential of the electric vehicle industry, I would point you to the explosive and disruptive innovation on the part of Tesla and its visionary CEO, Elon Musk. A recent article4 published by Forbes in August of 2016 noted that Tesla’s investors have backed the company with a market cap of over $30 billion, which is an impressive demonstration of Tesla’s potential in the marketplace. However, the company is not without its challenges. The same Forbes report also noted that Tesla experienced losses of $888 million in 2015 and has yet to reach full profitability.

Despite the current challenges associated with the electric car industry, I have faith in the technology and the industry’s potential for growth. The world in which we live is becoming more and more reliant on emergent technology. It is my view that we should embrace the changes that are taking place around us and leverage them for the purpose of our collective economic benefit.

Barry Armstrong has over 30 years of experience in the financial industry. He founded the Armstrong Advisory Group in 2004 and has been sharing his financial knowledge with New Englanders on a daily basis during his Boston-based radio broadcast for nearly 20 years. Learn more about Barry and the Armstrong Advisory Group at Securities offered through Securities America, Inc. Member FINRA/SIPC and Advisory Services offered through Securities America Advisors. Barry Armstrong, Representative. Representatives of Securities America do not offer tax advice. Always seek the assistance of a tax professional familiar with the laws in your state. Armstrong Advisory Group and Securities America are unaffiliated. November 2016 – AT 1643494.1