Although electric cars have been around for several years, they’ve recently reappeared in headlines with Apple’s ($AAPL) rumored entry into the market, Tesla’s ($TSLA) announcement of their Model X and Volkswagen’s ($VOW.DE) increased investment in electric cars following a major emissions scandal.
So far in 2015, the Tesla Model S has been the best-selling electric vehicle with approximately 17,000 units sold year-to-date. The Model S is followed by the Nissan ($7201.JP) Leaf, Chevy ($GM) Volt, and the newer BMW ($BMW.DE) i3. Despite individual successes like the i3, which has seen a year-over-year sales increase of 150% (Q1 – Q3 2014 to Q1 – Q3 2015), in aggregate, electric cars have seen a 5% decline in the same period.
However, with several major corporations committing substantial resources to the development of electric cars with potentially futuristic features such as self-driving and automated parking, this historically slow cyclical sector has become very interesting with major ramifications to the future of the broader industry at large.
Several questions arise when attempting to gauge the implications of increased investment in the electric car space. Using AlphaSense, I was quickly able to identify answers to several diverse queries:
What geographic regions have seen, or are expected to see, the largest adoption of electric cars?
- Mitsubishi Motors ($7211.JP) – Transcript, April, 24, 2015
“We expect that the demand for EVs and PHEVs will grow in markets such as Germany, France, Spain, Portugal, and Norway.”
- Bayer AG ($BAYN.DE) – Press Release, October 13, 2015
“In the U.S., the electric vehicle market continues to experience significant growth, accounting for 39% of global electric vehicle sales in 2014.”
What businesses will be impacted by a rise / fall of future electric car sales?
- Ardiden Ltd ($ADV.AU) – IR Release, October 8, 2015
“Jumbo and large flake graphite is the highest flake value size of graphite and is expected to be in high demand for use in new technologies such as electric vehicles and home / industrial battery storage.”
- FMC ($FMC) – Transcript, May 11, 2015
“We expect strong growth in lithium hydroxide, driven by pure electric vehicle. Our advantage technology positions us as the leading supplier to this market.”
Have gas prices had any impact on electric car sales?
- McGraw Hill Financial ($MHFI) – Press Release, May 21, 2015
“High gas prices are contributing to increased hybrid and electric vehicle (EV) sales, which have accounted for 9.8% of all retail new vehicle sales in California in May, their highest level since August 2014. Hybrid and EV sales have also started to recover nationwide, representing 3.5% of all retail sales in May, up from a low of 2.9% in February.”
What less obvious companies are investing in the electric car market?
- Actia Group ($ATI.FR) – Interim Report, October 2, 2015
“With the launch of R&D programs to support … electric utility vehicles and public transit buses, R&D expenditures increased.”
- Solar Power Inc ($SOPW) – Press Release, September 1, 2015
“SPI Announce Strategic Investment in Electric Vehicle Rental Business … With China’s market for high quality rental cars growing daily, we are confident that consumers will appreciate the cost advantages of Yiwei’s solar-powered rental cars, the convenience of booking EV rentals anytime through their Internet-connected mobile devices, as well as the opportunity to participate in China’s green vehicle revolution through ‘green commuting’.”
- BYD Company Ltd ($002594.CN) – Press Release, September 16, 2015
“BYD’s Battery Electric bus employs many advanced technologies developed in-house by a staff of more than 15,000 R&D engineers including the advanced, BYD Iron-Phosphate battery which boasts the only 12-year-battery warranty in the industry.”
- Hilton Worldwide Holdings ($HLT) – Press Release, October 8, 2015
“Hilton Sparks Expansion of Charging Stations for Electric Vehicles”
What has big auto incumbent General Motors said about EVs?
- General Motors ($GM) – Transcript, October 1, 2015
“We need to improve EV charging infrastructure and reduce charge times which will help diminish range anxiety issues for customers … So we’ve invested in chemistry, we’ve invested in the electric motors, we’ve invested in the power controls of electric vehicles early on … We just signed a multiyear contract to build and demonstrate fuel-cell reconnaissance vehicle for the U.S. Army for their Tank Automotive Research & Development Engineering Center.” (pertains to fuel-cell vehicle, not electric)
Using AlphaSense to collect all the above information, I arrived at a few key takeaways:
- There is a need for infrastructure to support these electric vehicles. Hilton is adding charge stations to their hotels and GM is discussing the need to improve charging infrastructure in order to diminish range anxiety (which seems like it’ll be a hot term going forward).
- Lithium hydroxide and large flake graphite are commodities likely to become more valuable as electric cars become more popular.
- There may be space for tech products to capitalize on the trend. An app that will facilitate a daily rental of electric cars, or one that plots out and steers you towards charge stations may be in the works.
1. “Odd Mix Of 100% Electrics Up Big In September (US Electric Car Sales).” evobsession.com