The introduction of electric vehicles (EVs), which are gaining popularity around the world, has been a game-changer for the automotive industry. This is due to their advantages in terms of the environment - carbon free -, fully aligned with the ongoing ESG demands, financial savings for the logistic industry in a scenario of rising fuel prices, and lower production costs for automakers (given the reduced amount of auto parts required to assemble the electric vehicle). Grounded on such a favorable backdrop, EVs are becoming increasingly popular, mainly in developed countries. However, the need for massive investments in infrastructure, especially those related to fast charging stations and a more robust energy distribution backbone, has become a short-term challenge for the growing EV industry.
Despite the short-term challenges, I foresee great investment opportunities along the entire EV value chain, mainly in two segments: (i) Automakers, mainly newcomers; and (ii) Battery makers. In a nutshell, equity investment can be used to fund research and development, expand production capacity, and acquire new business opportunities. Electric Vehicles are an excellent choice because they are more efficient than traditional gasoline-powered vehicles, emit fewer emissions, and are often less expensive to operate and maintain. Furthermore, electric vehicles are becoming more affordable, making them a viable option for a growing number of consumers.
Globally, the equity rate in EV development and use is increasing significantly; the International Energy Agency (IEA) estimates that in 2020, it will have more than 5.1 million electric vehicles being used worldwide, up from 1.2 million in 2015. This shows an annual compound growth rate of more than 40%. Government incentives, technological advancements, and consumer demand all contribute to this growth. Additionally, EV prices have been decreasing gradually, making them more accessible to consumers. This growth is fueled by a number of factors, including lower battery costs, increased consumer awareness, and government incentives. Ultimately, the expansion of charging infrastructure and the increasing availability of public charging points are expected to contribute to the growth of EVs in the business market.
Who Are The Potential Winners or Losers?
(i) All electric vehicle manufacturers, and renewable energy providers could be potential winners.
(ii) Traditional gasoline and diesel vehicle manufacturers, oil and gas companies, and companies that produce parts for traditional vehicles are all potential losers. Additionally, some jobs in the automotive industry related to petrol and diesel engines may be negatively impacted.
Decreasing production costs and a clear upward trend of ESG demands set the tone for a profitable and accretive investment history. Global EV development and usage symbolize a fantastic opportunity for businesses to capitalize on. The global EV market is expected to expand significantly in the coming years with rapid growth, and it will decrease production costs. Therefore, businesses should invest in this trend. I'll suggest customers purchase equities in businesses that are involved in the development of EVs. Moreover, to take action, investors should conduct research on the EV industry's companies to determine which ones have the strongest growth potential before investing in them. Then, evaluate these companies' risk profiles and conduct a financial analysis.
The Upside Catalyst to the Trade Recommendation
The global demand for EVs is the positive catalyst for the trade recommendation of Equities in the expansion and implementation of EVs. The demand for EVs will increase as more countries and cities worldwide begin to transition to electric vehicles. The businesses operating in the industry will profit from the increased investment in EV research and development. Additionally, EV costs are expected to drop as demand rises, making them more affordable for a wider range of consumers.
Risks & Mitigation
Globally, governments are implementing regulations to promote EV development and use. These regulations are subject to quick change and may greatly impact the EV market. These regulations could have a negative impact on the equity markets if they are too restrictive or costly. Regulations that are subject to quick change can create uncertainty in the market, which could cause investors to become more cautious and less willing to invest in EV companies. In addition, regulations may also restrict the efficiency of EVs, and this could result in a slower adoption of technology, leading to slower growth in the market. This could also result in slower stock prices for EV companies. Nevertheless, the most effective strategy I could propose is to monitor the regulatory changes in key markets and adjust mitigation strategies as necessary.
How precisely will the Equity benefit/suffer from the altered market conditions brought on by the global development of EVs?
The global development of EVs will benefit the equity market in several ways. First, increased demand for EVs will create new opportunities for companies involved in EV production and sales and those involved in producing EV components and materials. This will result in higher profits for their businesses, benefiting their shareholders. Furthermore, increased demand for EVs will boost demand for the materials and components used by their manufacturer.
Analysis of the development of EVs in Australia, according to the website "The Driven"
SWOT Analysis -
Swot analysis is a technique for assessing these four aspects of a business:
- Iea. “Global EV Outlook 2022 – Analysis.” IEA, https://www.iea.org/reports/global-ev-outlook-2022.
- Iea. “Electric Vehicles – Analysis.” IEA, https://www.iea.org/reports/electric-vehicles.
- The Wall Street Journal. “Search Results | Wall Street Journal.” The Wall Street Journal, Dow Jones & Company,
- Kavanagh, Michael. “Electric Vehicle Revolution Drives Power Grid Evolution.” Financial Times, Financial Times, 14 July 2021,
- Virta Ltd. “The Global Electric Vehicle Market in 2022 – Virta.” Virta Global, Virta Ltd., 20 July 2022,