Questions you can ask your UBS Financial Advisor
- Why should you stay on top of key car trends?
- What effects can we expect from improved car batteries?
- How can electric vehicle sales impact your auto industry investments?
While the race for profits in the electric car industry took time to heat up, vehicle manufacturers from all corners of the globe are finally getting on board with electric vehicles. 2020 models are rolling out now. If vehicles are a part of your portfolio, you'll want to stay on top of these key trends.
Electric vehicle demand not slowing down
A recent UBS Chief Investment Office report examined an exciting new trend in electric vehicles. When Porsche zoomed into the market with the Taycan electric car, it sold out its original first-year capacity so quickly that it doubled production capacity to 40,000 per year.
The Taycan will reportedly sell for over $150,000 and the company is installing fast charges at dealerships around the US and Europe to support drivers in key markets. Porsche offers another signal that electric vehicles will likely grow in popularity. Volkswagen, Jaguar, Mercedes-Benz, and Audi have all jumped into the ring for a slice of the high-end EV market sales previously dominated by Tesla. CIO estimates that 25 percent of new cars sold could be electrified by 2025, with more than 10 percent being full electric. Consider this statistic when evaluating any auto industry investment.
Battery technology key to to EVs
Batteries and battery technology are vital for continued success for electric vehicles. The Porsche network of fast chargers will give the Taycan 62 miles of range with just four minutes of charge time. A full battery will take drivers about 310 miles (500 kilometers).
Many new vehicles are fully electric, but not all EVs run 100 percent on battery power. Electrified vehicles include hybrid, plug-in hybrid, and other powertrains. Fully electric vehicles are considered electrified. However, not all electrified vehicles are fully electric.
Poor battery performance is a factor that may have hindered electric car sales in the past, but will become less of a factor over time. Automotive and technology companies are hard at work looking for ways to squeeze more miles out of each charge. Overall, we can look forward to better batteries that allow for a longer range that are also more affordable. That should bring down the cost of EVs.
Don't count out gasoline just yet
While EV sales are growing, traditional gas powered, vehicles still make up the majority of the market. If electrified vehicles make up 25 percent of new sales in 2025, that is a big leap from where we are today. Keep in mind that electrified vehicles don’t have to be an all-or-nothing proposition. Hybrids and plug-in hybrids are all a part of the electrified landscape
Electric powered vehicles and other alternatives offer an exciting opportunity in transportation. And they all still come with that new car smell.