Basis Points - Electric Vehicles

Investment Themes 2024: Electric Vehicles

Electric Vehicles (EVs) have become one of the most popular and best-selling types of vehicles worldwide.

Last year, EVs accounted for around 8 percent of all new passenger vehicles sold in the US – a record amount. Estimates suggest that EVs could make up half of the total vehicles in the US by 2030, however, even if EVs only grew to make up 20 or 30 percent by this time, this would still suggest an impressive rate of growth and adoption. Not to mention all of the other countries around the world that are adopting EVs.

Tesla’s Model Y was named the world’s best selling passenger vehicle in 2023, a title which was obviously previously reserved for internal combustion engine vehicles (fossil fuel powered vehicles). This is a good show of the growing appetite for EVs around the world, despite some concerns like “range anxiety” – where people are concerned about being able to find charging stations along the way when on longer commutes.

To enable the growth of the EV fleet to such a size, it is estimated that the number of EV charging stations would need to expand to more than 28 million within the US. So, there is great potential for growth within this side of the industry also. Schneider Electric, one of our core holdings related to this investment theme, is the world leader in development of fast-charging stations and is positioned to capitalise on the development of the infrastructure needed for the future.

In India, one of the fastest growing emerging markets, most Indian consumers would opt for either a full electric, or a plug-in hybrid EV for their next vehicle purchase:

The Lifestages portfolios invest into the top companies within the EV and related industries and are well-diversified throughout our other key themes. ESG considerations are factored into portfolio construction and the investment themes, making the EV industry an ideal value proposition for the long-term.

What we're reading: Electric Vehicle Trends | S&P Global Mobility

Until next time!

Martin & Finlay

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