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Time to Speculate on Electric Vehicles?

Tuesday, 10 May 2011 | 6:34 PM ET
Executive Decision: A123 Systems
The Obama Administration seems to have thrown its weight behind electric vehicles, and battery maker A123 Systems could well be a company that benefits, says Cramer. David Vieau, A123 Systems CEO, explains why.

With gasoline at $4.50 a gallon in some places, Cramer wondered Tuesday if it was time to speculate on electric vehicles.

Take A123 Systems , the “Mad Money” host said. A123 Systems designs, develops and manufactures rechargeable lithium-ion batteries and battery systems for cars, buses, and trucks in addition to storage devices for the electric grid. Cramer called the company a leading player in hybrids, plug-in hybrids and full-on electric vehicles.

“If electric vehicle production starts to ramp all over the globe,” Cramer said. “Then A123 might very well turn out to be an excellent speculative stock.”

If government funding of the industry dries up, however, he said betting on electric cars could be unsafe.

The Waretown, Mass.-based company is banking on the big electric vehicle build out. A123 Systems has been doubling its manufacturing facilities and hiring more workers, Cramer said. On Monday, it reported a 51-cent loss, which is 5 cents worse than expected with revenues that fell 26.1 percent year-over-year. Yet Cramer noted management was very bullish about the next quarter, as they predict revenues could double sequentially thanks to higher volumes.

So is it finally safe to speculate in A123? Cramer spoke with CEO David Vieau to find out. See the full interview by watching the video.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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