The future of capital expenditure will be focused on value chains that have been or will be mostly disrupted by technology.
The fast adoption of electric cars, replacing internal combustion engines, won't just impact the balance sheets of traditional auto companies.
The disruption will be felt from commodities and new materials, to semi-conductors and capital goods and ultimately infrastructure to.
The Chevy Bolt is actually the first electric car that can give us a glimpse of how mass-produced electric cars will be built in the future. That’s why UBS Evidence Lab bought one and took it apart, piece by piece.
39 UBS analysts pored over 563 parts, here's what we found under the hood:
Electric vehicles are getting cheaper to produce. Faster. We found the cost of the powertrain components is lower than previously estimated. By 2023 carmakers in Europe will be able to sell an electric car at a 5% margin. And it’ll be cheaper than conventional cars.
Q-Series: UBS Evidence Lab Electric Car Teardown – Disruption Ahead?
UBS Evidence Lab performed analysis on the implications of the global autos industry by tearing down the world's first mass-market electric car
China is now the biggest exporter and second biggest importer in the world. The US is China's main export market, boasting a market share of 52%* for its exports of electronic products including cell phones and computers.
The Trump administration wants to narrow the US trade deficit, especially its bilateral deficit with China. Theoretically, there are several ways a trade war betweenthe two countries could be waged (see infographic) but we think that placing blanket tariffs on exports is not an option in this case. The most likely scenario, in our view, is increased targeted trade barriers in late 2017 or early 2018.
Targeted US measures against Chinese exports may have a smaller macro effect on China but a more serious impact on chosen sectors – and leave neighbouring countries like Hong Kong, Taiwan, Korea, Malaysia exposed.
*Tao Wang, China Economic Perspectives 27 March 2017
India - one of the few countries where Uber drivers accept cash payments - reeled from the shock removal of 86%* of its cash in circulation last November.
As customers have found new ways to transact, Fintechs have gained ground in the payment business, posing a challenge for traditional banks. In tracking ranking and download trends, UBS Evidence Lab believes demonetization could act as a catalyst for increased adoption of digital channels.
India already boasts a population with mobile banking penetration ahead of the UK, US and Japan, and UBS expects less of an impact for banks that are effectively engaging their customer base as more transactions shift online.