The correction in the prices of shares of electric vehicle manufacturers in recent months is temporary, experts at UBS Global Wealth Management say. Analysts expect the real growth of these shares to come and name the main prerequisites.
Shares of the global electric vehicle market leader Tesla (TSLA) are down 13.4% since early 2021, shares of American rivals General Motors (GM) and Ford (F) have risen strongly since the beginning of the year, but showed declines of 3.7% and 5. 45% over the last week.
Shares in Chinese electric vehicle makers Nio (NIO), Xpeng (XPEV) and Li Auto (LI) are down 27%, 26.7% and 21.6%, respectively, since the beginning of the year.
However, this is all, according to experts from the world’s largest wealth management company UBS Global Wealth Management, short-term market fluctuations caused by assumptions about the excessive growth of these shares in 2020. In their opinion, this is not the end of the upcoming growth trend.
UBS Global Wealth Management Chief Investment Officer Mark Hafele urges investors to take into account the latest trends, long-term company statements and factors that will drive the growth of the electric vehicle market.
Impacted by the COVID-19 pandemic, global car sales in 2020 showed that with an overall 15% drop in car sales, global electric vehicle sales grew 43%, accounting for 4.2% of the market.
Hefele believes that the trend will continue and the share of electric vehicles in the global automotive market will continue to grow rapidly.
“This will benefit the EV makers as well as the traditional carmakers that are adapting the fastest to growing consumer preferences for EVs,” said UBS Global’s chief investment officer.
In addition, this natural consumer demand for EVs will be fueled by increasing supply from traditional automakers, which have announced their programs to switch to EVs, driven by tighter US and European emissions regulations.
For example, General Motors and Ford are investing tens of millions of dollars to transform their factories from ICE-powered cars to electric vehicles. These American automakers are planning to produce several new electric vehicles a year.
German auto giant Volkswagen Group, in turn, recently surpassed Tesla in Europe, ranking # 1 in electric vehicle sales in the first two months of 2021. Earlier in March, Volkswagen unveiled its long-term plans for battery and charging technology through 2030.
And this is not a complete list of companies that produce electric vehicles – some of them are already public and sell their shares on the market, like the Workhorse Group (WKHS), others, like, for example, Proterra, are just preparing to enter the stock market to attract investments. For more information on other EV companies, read Marketinfo.pro’s article “15 Companies That Can Benefit from the Growth of the Electric Vehicle Market in 2021”.
Analysts see the emergence of fleets of electric self-driving taxis as a factor that will continue to “fuel” these trends. The current success of car-sharing services suggests that in the future, using a car will not automatically mean owning it.
“Overall, we project about $ 400 billion in potential sales from Smart Mobility self-driving technologies by 2025, of which electric vehicles will account for more than half, eight to nine times more than today,” UBS Global said. Wealth Management.
One of the most optimistic analysts about the future of electric vehicles, Wedbush’s Dan Ives, believes the industry could provide $ 5 trillion in market opportunities. over the next decade.
So the current fall in EV stocks could be a good buying opportunity for long-term investors.