Market Outlook: the Electric Vehicle Race
The electric car industry has been in focus and attracted lots of investment as the global economy transitions away from fossil fuel. Battery costs continue to drop, and the share of renewables in major developed markets such as Europe is growing. Sales of passenger EVs (both plug-in-hybrid and full-electric cars) grew by 47% from the first half of 2018 to 1.1 million in the first half of 2019, a report by research firm Wood Mackenzie showed.
According to Bloomberg New Energy Finance’s report, Electric Vehicle Outlook 2019, Electric Vehicles (EV) could account for 57% of the global passenger car sales by 2040. That means about 6 of 10 cars on your street could be using a battery for recharging. For now, however, the global sales of electric vehicles (EV) is dominated by a few companies serving the high-end, luxurious market.
Volkswagen’s Porsche also recently unveiled its first electric sports car, the Taycan, a sleek, four-door sedan. That’s its second luxury brand to launch an electric car — the first is Audi.
Though the EV industry is still developing, leaders are beginning to emerge. Given the size and expertise of some of these companies, they could be key players as industry growth gets turbocharged in the coming years.
Some of the top players in EV include:
Tesla
Elon Musk’s pretty and pricey Tesla cars have partly created the global electric-vehicle market. Tesla (NASDAQ: TSLA) is focused on developing plug-in EVs and in 2018, it ranked as the largest EV maker.
The company sold almost 250,000 units in 2018, which was 12% of the market. The company also manufactures rooftop solar panels and battery storage units.
Tesla’s two most popular vehicles are the Tesla Model S and Tesla Model X, and increasingly, the lower-cost Tesla Model 3.
BYD
Warren Buffett-backed “bee-YA-dee” leads other Chinese manufacturers in the EV market and is firmly in a hot contest with Tesla.
Unlike loss-making Tesla though, BYD (HK: 1211) posted a net profit of $210 million in the six months ended June, that’s an increase of 204% from the same period a year ago.
The Shenzhen-based car and battery maker recently inked one of its biggest foreign deal with Toyota to build Toyota-branded electric cars that will hit the Chinese market by 2025.
China accounts for 54% of the world’s sales of plug-in-hybrid and full-electric cars, and BYD seems to be well-positioned in this market.
Renault-Nissan-Mitsubishi Alliance
Three heads should be better than two or one. French car manufacturer Renault (EPA: RNO), its Japanese peer Nissan (TYO: 7201) and Mitsubishi (TYO: 8058) had formed an alliance to provide better scale and efficiencies to better compete with the rest of the market. Each automaker accounts for only a little of global sales but combined they have shown there’s strength in numbers.
The Alliance has, however, been encumbered with the crisis that rocked its leadership since Carles Ghosn was arrested. The 100,736 EVs sold in the first half of 2019 represented a 9% share of the EV market, a dip from 11% in the same period of 2018. The cumulative sales of EVs since 2010 stand at 724, 905. Nissan still has one of the best-selling electric car model in history — the Nissan LEAF. It has over 134,392 in sales.
Geely Group
Chinese manufacturer Geely Auto Group (HKG: 0175), which owns Volvo Cars, entered the new energy market last year, unveiling multiple models of all-electric and plug-in hybrid cars.
Last year, Geely sold about 68, 549 electric vehicles. Production and sales could increase as Geely broadens its portfolio. Earlier in 2019, it launched a premium all-electric car brand “Geometry.” The company said it had already received more than 26,000 orders globally for its first model, the Geometry A.
BMW
This German car company first thrust into battery vehicles was with the BMW i3, an all-electric luxury SUV. It has sold more than 150,000 models since 2013.
According to reports by the Financial Times, BMW could be installing plug-in hybrid technology into its best-selling models, which allows users to have access to both a gasoline engine and a rechargeable battery. There are also plans for 13 battery-only models by 2023.
Volkswagen
Another huge German automaker with several plans lined up for transitioning from high-carbon cars. It has an ambitious target of becoming carbon-neutral by 2050, and before then, topple Tesla as the world’s top-selling EV maker by 2025.
So far, it has an affordable and reliable electric option in the Volkswagen e-Golf. The automaker is targetting new all-electric cars and plug-in hybrids for all its luxury brands like Audi, Porshe, Bentley and Lamborghini.
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