EV Automakers on the Move

Electric car (EV) has come a long way and the industry has a poor track record with electric cars in the earlier years. The first EV1 from General Motors appeared on American road in 1996 but was cancelled later in 2003. Other EV cars such as Chevrolet’s Volt and Nissan’s Leaf had failed to achieve commercial success and were pulled out from production. 

Electric Cars are Already Gaining Momentum

As early as 2010, annual sales for EV were close to zero. Traditional automakers are being prodded to move more quickly by two additional factors: strict new EU regulations that require auto manufacturers to dramatically reduce the CO2 emissions starting 2020 and in China, the government has implemented a system that requires automakers to make clean vehicles or purchase credits for the CO2 emissions their cars produce.

According to EV-Volume, the sales of EV only started to gain its market share in 2013 and the momentum has been growing exponentially since, gaining y-o-y growth of about 50% on average. The global EV sales continued strong. EV markets are seeing sales exceeding 10 million in 2022, a 55% increase in sales in comparison to 2021. A total of 14% of all new cars sold were electric in 2022, up from 9% in 2021 and less than 5% in 2020. Currently, we have three markets dominated the global sales i.e. China, Europe and the United States. China, the largest EV market, accounts for around 60% of global EV sales. Europe, the second largest market, has EV sales increased by over 15% in 2022 whilst the United States, the third largest market, has reached a sales share of 8%.

The Largest EV Companies in the Market

According to EV-Volumes, BYD, a Chinese conglomerate, has emerged as the largest EV company based on the nearly 1.9 million EVs manufactured in 2022. About half of those were plug-in hybrid EVs (PHEVs) and the other half were battery electric vehicles (BEVs). Tesla, ranked second, built 1.3 million EVs in 2022, the most by a United State company. Tesla also built the highest number of battery electric vehicles in 2022. Volkswagen came third while GM and Stellantis round out the top five EV manufacturers.

EV Global Outlook in 2023

EV sales are expected to continue strongly through this year. So far, over 2.3 million EVs were sold in the first quarter of the year, 25% more in the same period last year. The EV sales is expected to reach 14 million by the end of 2023, representing about 35% increase y-o-y. With this, EVs could account for 18% of total car sales in 2023.

National policies and incentives will help bolster sales. In India, EV and component manufacturing is ramping up, supported by the government’s USD 3.2 billion incentive programme that has attracted investments totalling USD 8.3 billion. Thailand and Indonesia are also strengthening their policy support schemes, potentially providing valuable experience for other emerging market economies seeking to foster EV adoption.  

Meanwhile, battery manufacturing continues to expand, encouraged by the bright outlook for EVs. The announced increase in battery manufacturing capacity by 2030 appears to be more than ample to satisfy the demand expected from government commitments and could even surpass the requirements for electric vehicles in the Net Zero Emissions by 2050 Scenario. As a result, there is a strong possibility that electric cars could achieve higher sales shares than what was initially anticipated based on current government policies and national targets.

New Players with More Affordable Models

The EV market is becoming increasingly competitive. There’s a growing number of new players, primarily from China but also other emerging markets, offering more affordable EV models. The number of available EV models has reached 500 in 2020, more than double the options available in 2018. Consumers can choose from an increasing number of options for EVs.

Besides the established renowned automaker, there are new entrants joining the bandwagon and gaining good traction in EV production such as Lucid, Rivian, Bollinger and Fisker. Just recently in early July, a slew of electric vehicle manufacturers such as Rivian, Tesla, and BYD released long expected data on deliveries, with all of them outperforming analyst expectations and sending their respective shares up sharply. Along with the robust deliveries, Rivian announced that it had delivered its first vehicles overseas through its partnership with Amazon. Meanwhile, BYD also took the opportunity to unveil its new sport utility vehicle “Denza N7” with pre-orders already exceeding 20,000 units since the Shanghai Auto Show in April this year.

Investing in EV Companies

The global trend is increasingly favouring EVs, with numerous automakers committing to an all-electric future. Notably, the federal government and over 40 states are providing incentives like tax credits and rebates to support the adoption of EVs. Furthermore, EVs are consistently capturing a larger portion of the total vehicles sold annually. 

For potential investors interested in the EV sector, there are various investment opportunities available, including:

• Investing in automotive stocks with strong EV divisions;
• Investing in EV stocks;
• Investing in EV ETFs; and
• Investing in EV battery stocks.

Diversifying investment portfolios with EV companies can be accomplished through various means. One of the simplest options is to consider EV ETFs which offer a broad selection of EV-related stocks without the need for individual stock picking. However, if one prefers a more hands-on approach, focusing on the prominent and established EV companies could serve as an excellent starting point for your investment strategy too.