Welcome to IDI Capital. Today, let’s talk about the hottest and booming market in 2021 : Global Electric Vehicle (EV) market.
According to many reports, the global EV market demand was estimated at 2,373.5 thousand units in 2019 and is expected to witness a CAGR of 41.5% 2020 to 2027.
Recent numbers reported clearly indicate the growing demand for electric vehicles, driven by technological advances and favorable sustainability policies.
EV adoption is increasing and Goldman Sachs now expects EVs to account for 18% of global new light vehicle sales in 2030 and speed up to 29% in 2035.
Traditional automakers, for example, Ford, Toyota, Daimler, and BMW… etc, are accelerating their EV launch plans, partly to comply with increasingly stringent regulations in Europe and China. COVID-19 delays some of these, but by 2022 there will be over 500 different EV models available globally. Consumer choice and competitive pricing will be key to attracting new buyers to the market.
By 2040, over half of all passenger vehicles sold will be electric. Markets like China and parts of Europe achieve much higher penetrations, but lower adoption in emerging markets reduces the global average.
Despite the rapid growth, there will be 1.4 billion passenger vehicles on the road in 2030 and EVs account for just 8% of these. This rises to 31% by 2040 as the fleet slowly changes over.
Tesla’s technology, innovations, leadership in the EV space and improving profitability make it an attractive long-term play.
On the other hand, Chinese Tesla rival Nio, recently reported forecast-beating earnings results, while profits at recent IPO Xpeng also came in ahead of Wall Street analyst estimates.
China’s market may grow faster than the U.S., especially if a Biden administration does not restore EV credits, but Tesla is poised to succeed in China, where as much as 40% of its sales may soon be.
So, What’s the strategy for investing in the global EV market? Remember, never miss the opportunity of the mega trend like this, but also never put all your eggs in one basket.
Forget the numbers of prices, Focus on the power of growth.
This is the analysis by Dr. John Liao at IDI Capital, you can check our portfolios on etoro. Welcome to follow and subscribe.