Please try another search
SECTOR: The global listed auto industry is the most divided of any we have seen. From Tesla’s (TSLA (NASDAQ:TSLA)) still-giant $800 billion market cap and 70x price earnings valuation, to luxury Ferrari’s (RACE) 50x. Down to the US ‘big-3’ General Motors (NYSE:GM), Ford (F), Stellantis (LON:0QXR) (STLAM.MI) on barely 5x. The EV growth story has barely begun (see chart), the industry rapidly consolidating, and its current ‘winter’ will ease. Investors are taking the long view. Tesla is the most owned stock on eToro. NIO (NIO) is also in the top ten. With the nearest legacy auto outside the top 30. At other extreme, a big valuation rerating awaits the legacy maker that can make the transition.
EV: The ‘death of EV’s’ story is wrong. Global sales grew 25% in Q1 this year and near 20% of all cars sold globally last year were electric. High growth expectations are being tested by less government policy support and consumer growing pains, from charging to range anxiety and resale values. But new vehicle offerings are broadening and prices falling fast. China has led adoption, accounts for 60% global sales, and is the only market where EV prices are lower than ICE (NYSE:ICE). The global adoption story has barely begun. With under 3% of the 1.5 billion cars on road today EV’s, focused on China and Europe. With a major rest of world and US catch up to come.
ICE: Global industry volumes boomed 9% last year as normalised supply chains and restocking outweighed surged interest rates and lower consumer confidence. A car is a consumer’s 2nd biggest purchase, after a house, averaging $47,000 new in US. Volumes likely slow to steadier state 3% growth this year of 88 million cars. The legacy sector is on a low valuation, given a twin threat. Of slower consumer and rising Chinese competition. And high EV adoption costs with legacy assets and outsourced supply chains. Holy grail is a legacy leader like Volkswagen (ETR:VOWG_p) (VOW3.DE), no3 in global EV sales, threads the transition needle and see’s a rerated valuation.
Over the last five days, the Dow Jones Industrial Average (DJIA) has continued to show weakness, having slumped by -3.99% to present 38,111. This level was last seen at the end of...
Technology stocks have continue to lead the broader market higher in 2024, posting new high after new high. At the same time, this is the very reason we watch the Nasdaq related...
US has slowed issuance of export licenses for AI chips, citing national security concerns. This could hurt chipmakers reliant on China, a key market for Nvidia. Nvidia stock...
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.