GROWTH: IEA data shows Q1 global electric car (EV) sales up 75%, taking world fleet to 18.5 million, driven by policy support of subsidies and mandates, and industry action on new models and longer ranges. China dominates, selling 3.3 million cars last year, vs Europe’ 2.3 million, and US’ only 0.6 million. Constraints range from charging infrastructure to heavy-duty vehicles, and rising battery material prices. EV volumes are seen growing 10x by 2030 to 200 million, or 30%/yr, under current policies. This is a big long term prize amidst recent sector stock weakness.
LONG WAY: EV’s are c10% of car sales today but under 2% of the global installed base, with a multi-decade runway of strong growth. Norway with 86% of new sales EV points the way. By contrast, US has tightened fuel standards and funded chargers but lags with only 20% penetration seen by 2030, despite Ford (F) and GM (GM) aiming for 100% EV sales. By contrast, Europe’ penetration seen at 35%, and China at 45% helped by its ¾ control of global battery production.
FOCUS: Similar to renewables, EV stocks have underperformed this year despite the strong growth outlook, as rising bond yields have crushed high valuations. The silver-linings are the more attractive valuations for long term investors, with Tesla (TSLA) price/earnings ratio down to c50x, and traditional ‘legacy’ autos as low as 3x (STLA.MI). EV supply chain stocks, like lithium miners, have performed much better. See @Driverless, @ChinaCar, and @BatteryTech.
All data, figures & charts are valid as of 02/06/2022