Electric Vehicles (Themes Trading)
Electric vehicle manufacturers became market darlings in 2020, with stocks staging searing rallies sparked by the predicted demand for cleaner cars. Despite solid car sales growth, 2021 was less positive for stock prices. What about 2022?
This year alone saw Electric Vehicles (EV) sales more than double, and Bloomberg has forecast global sales reaching the USD 1 trillion mark by 2030.
With traditional combustion engine, accounting for 97% of all cars sold there is significant room to growth for EV companies. Yet with total market capitalization of traditional and EV car manufactures near equal, upside in EV valuations look to slow.
The year saw pure play electric manufacturers roll out new models, established names launching massive EV campaigns, and investors rewarding every company in the industry.
Tesla
Tesla was a sparkling example, almost doubling in value and hitting a market capitalisation of just over $1 trillion. Latest News According to Bank of America, the global uptake of EVs is putting into motion a three-year wave of IPOS that could raise USD 100 billion before the end of 2023. The COP26 climate change summit gave way to encouraging developments, with governments, automakers and others agreeing to transition to 100% zero emission sales of new cars and vans by 2040 globally, and by no later than 2035 in leading markets. Individually, EV companies and dedicated supply chain operators are recognising the opportunity and making bold moves to secure a piece of the pie. The developments in the EV segments was hot and fast in 2021.
Nissan, Volvo, BMW and the others
Japanese automotive giant Nissan will invest USD 17.6 billion over the next five years to accelerate the electrification of its product line. Swedish multinational Volvo Cars is planning to become a fully electric car company by 2030, and fully electric vehicles will represent at least 50% of German multinational BMW Group’s deliveries by the same year. Elsewhere in Germany, electric vehicle start-up Sono Motors has experienced explosive success via a US IPO, skyrocketing from USD 15 to USD 38.50 in its first day.
United States-based electric-truckmaker Rivian Automotive Inc raised USD 13.7 billion in its US listing, making it the largest IPO of 2021. The stock has increased 47% from its offer price, and has a market cap of USD 111.6 billion. Ford has ambitious plans to overtake Tesla to become the largest EV producer in the world. The American multinational is working on tripling production of its all-electric Mustang Mach-E by 2023 to meet demand.
Chinese car and battery maker BYD Co. raised USD 1.8 billion in a Hong Kong share placement, its second such deal in 2021. In Q1, the Warren Buffett-backed company secured USD 3.9 billion selling new shares. Tesla continues to bet on China, which is likely to represent 40% of deliveries for the EV maker in 2022. Californian start-up Lucid Air’s first vehicle is boasting high performance and the longest range of any electric vehicle. More than 17'000 reservations have been made for the Air sedan, representing an order book of USD 1.3 billion.
Outlook 2022
The electric vehicle market is booming, and 2022 will see China and the United States go head to head for market domination. This year, as EV sales increased, internal combustions vehicles sales dropped. This ratio is expected to grow steadily reaching just above 15% by 2025. Currently, market growth in China is much faster than the United States.
According to China’s Passenger Car Association, deliveries of newenergy vehicles increased 121% from a year earlier, and market penetration is predicted to hit 70% by 2030.
Amid the rise in demand for EVs, there’s still a global semiconductor shortage which has impacted deliveries and purchases.
Despite the ongoing challenges, Chinese EV manufacturers NIO, Xpeng and Li Auto have scaled up deliveries in the domestic market. Despite the rapid growth of some high-profile EV companies, EVs will be a meanigful and wide investment category that will have many winners. Currently, the global electric vehicle market is projected to reach USD 802.81 billion by 2027, registering a CAGR of 22.6%.
E-mobility
ISIN CH0572904743
Valor 057290474
Symbol ECARTQ
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