The future of the automobile industry is electric
Biggest year for EVs yet as demand surges. The DBS Chief Investment Office introduced Electric Vehicles (EVs) as a new investment theme in June 2021 and the call has panned out as expected. According to EV volumes, global EV sales in the first 6 months of 2021 are up 168% y/y, with Europe, China, and the US leading the way (+157%, +197%, and +166% respectively). 2021 is set to be a record year for the industry as the strong momentum continues and industry sales is estimated at 6.4m units (this constitutes a 98% y/y increase).
The future of the automobile industry is electric – investors’ appetites for EV companies are skyrocketing. Every automaker has announced plans to launch electric models, with some even setting timelines on when they would go full electric. For instance, in October 2021, car rental giant Hertz jumped in the EV game with an order of 100,000 Teslas to join their fleet. More recently, in November 2021, EV maker Rivian listed at USD70b valuation after having delivered 156 cars (mostly to employees). In contrast, Tesla’s initial public offering in 2010 was merely USD1.7b, despite delivering 1,500 cars. This suggests that market appetite for the EV space has grown massively over the decade and investors are willing to assign higher valuation multiples for EV companies.
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