Toyota stocks are trading 20% off their peaks. The company has made a strategic target hybrid, electric and hydrogen vehicles manufacturing. EV makers are now experiencing some issues with the production of batteries. So, prices on new electric vehicles rose sharply. Car makers and battery producers are working together to increase production, but this is not a one time story and may have an effect in a few years.

Electric vehicles are considered to be rather luxury cars, but they are even more expensive now. Tesla has recently raised its prices for some models by $6,000. Whatever the case, EV production is expensive and prices start at $50,000 per car. Hybrids are more affordable as it may cost around $30,000 for Toyota’s popular RAV4 model, while the same model with the combustion engine would cost $27,500. But the Hybrid version can make up to 51% more miles and leave a significantly lower carbon footprint.

Humanity is moving toward electric transport, but now they are considered to be more of a status vehicle. So, hybrids will be in demand for now and that would allow Toyota to raise its revenues along with improving electric vehicle technology.

Toyota has EV / EDITDA ratio at 11.8 while Tesla has it at the sky-high level of 32 with the same comparable business margins. So, TM stocks are a long term perspective bet.