Elon Musk, Behind You: Investments in Electric Vehicles Are Awakening - Walla! Business

2020-09-23T09:26:23.161Z

Tesla has so far been a hit in the field of electric vehicles, but alongside it have emerged a number of alternatives. New Chinese manufactures luxury performance sports cars, Nicola markets a rugged SUV based on an electric motor. Shares of electric vehicle manufacturers are traded in great volatility - which one is recommended for investment?

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Elon Musk, behind you: Investments in electric vehicles are emerging

Tesla has so far been a hit in the field of electric vehicles, but alongside it have emerged a number of alternatives.

New Chinese manufactures luxury performance sports cars, Nicola markets a rugged SUV based on an electric motor.

Shares of electric vehicle manufacturers are traded in great volatility - which one is recommended for investment?

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Not alone in business.

Elon Musk (Photo: Gettyimages)

Barriers to entry for the electric car market are relatively low compared to barriers to entry for cars based on combustion engines since the establishment of a production plant for cars with combustion engines requires higher investment compared to the development and establishment of a production plant for electric cars due to investment in machinery and robotics, greater workers and regulatory requirements.

Also, a large portion of the production cost for an electric car is attributed to the battery itself.

This is why there are quite a few start-ups and companies engaged in the design, development and production of electric cars, with the batteries themselves, which can cost even more than a quarter of the price of the car, provided by an outside supplier.

Also in the field of batteries and energy storage there are quite a few car companies and other companies trying to develop more advanced batteries.

On Tesla's Battery Day, Elon Musk addresses this issue, with all forecasts saying that in the coming years the range of electric vehicles will be increased by tens of percent through increasing energy capacity, charging speed and battery life, all those factors that currently limit car owners.

In this context, we can also mention the Chinese company New, one of the leading companies in the world, which recently announced that it will allow its car buyers to purchase the cars without batteries and thus be able to receive a significant discount, the batteries can be purchased separately from the company itself or other suppliers.

It would be true to say that all car companies in the world are connected in one way or another to the world of electric vehicles, whether it is through research and development, production, investment in young companies in the field, battery development, etc.

You can see in the list of the leading models in electric car sales models from companies like Chevrolet, BMW, Audi and Jaguar.

Just a few days ago, General Motors also announced an investment of about $ 2 billion in Nicola, which focuses on developing vans and trucks.

There are also quite a few start-ups in the field such as Rivian, a company that develops vans and electric SUVs (Amazon and Ford among investors), Fisker, a company that develops sports cars and crossovers (Leonardo DiCaprio and the Cutter government among investors), Lucid, a company that develops luxury executive vehicles, and Cano. The developer of a minivan with the ability to assemble the seats in the shape of a living room, but the leading players in the world of electric vehicles in terms of technology and innovation whose shares are traded on the stock exchange are Tesla (TSLA), New (NIO), Lee (LI), Expeng (XPEV) and Nicola (NKLA).

Tesla

The most famous.

Tesla car (Photo: Keinan Cohen)

As mentioned, Tesla (TSLA) is the best known and largest electric car company in the world, the company produces several models such as the Model X crossover, the luxury model S and the Model Y recreational vehicle, but above all stands the best-selling family recreational vehicle in the world with over 500,000 vehicles Sold since its launch to date, the Tesla Model 3. In addition, Tesla has announced in recent years a number of models expected to be released by 2022, such as the electric semitrailer truck, roadster sports car and electric pickup truck, the cybertrack.

Tesla's market capitalization (TSLA) stands at about $ 410 billion, more than any other car company in the world, with sales of only about 1.1 million vehicles since the company's inception and an expected sale of 500,000 vehicles in 2020, many investors who are not comfortable with the value Tesla's high looks for comparison on traditional car companies such as General Motors for example sold over 7 million vehicles in 2019 alone and its market value today is one tenth of Tesla's market value.

Undoubtedly, it can be said that the market prices Tesla as a technology company with the potential for very large growth, both in the automotive industry and in the field of batteries for electric vehicles.

Tesla ended 2019 with revenues of over $ 24 billion but nevertheless ended the year with a loss of about $ 860 million, however in the last four quarters Tesla showed profitability which made it meet the conditions to enter the S&P 500, but contrary to market expectations , She did not enter this index in the end.

New

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New (NIO) company from China, known as the "Chinese Tesla", which develops and manufactures, among other things, a luxury sports car with 2 seats, crossovers and family cars, the crossover model ES6, is the best-selling model of New with more than 2,500 dedications last August.

New's market capitalization stands at about $ 21 billion, the company is expected to sell about 40,000 vehicles by 2020 with expected revenues of over $ 1 billion this year, but despite this it is still not expected to reach profitability this year.

In terms of pricing according to the New EV / SALES multiplier is cheap compared to Tesla.

New As mentioned recently announced the construction and deployment of dedicated stations on the highways in China for rapid battery replacement, this is the first company that announced and also works to establish a wide deployed infrastructure when already over 140 such stations operate in China when by 2021 the company intends to operate more than 500 such stations Throughout China.

to me

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Lee (LI), a Chinese company founded in 2015 and issued on NASDAQ at the end of last July.

The company is currently valued at about $ 14 billion.

The company meanwhile produces one vehicle, its first model called Xiang One of which about 12,000 units were delivered during the months of January to July this year, it is a type of sophisticated hybrid vehicle that uses two types of motors, electric motor and internal combustion engine, when the internal combustion engine does not drive Directly the wheels but extends the range of the electric motor.

The company's revenue is expected to reach about $ 1 billion by 2020 but the company is not expected to be profitable in the next 3 years.

Expeng

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XPEV, another Chinese company founded in 2014 and listed on the New York Stock Exchange in late August.

The company is currently valued at about $ 13 billion.

The company sells two models, the G3 crossover, and the P7 family model, in total the company delivered from January to August this year about 10,000 vehicles.

Nicola

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Another interesting company is Nicola (NKLA), a company that develops electric pickup, electric trucks and hydrogen-powered trucks.

The company's value currently stands at about $ 17 billion, after sharp declines in the past week.

In conclusion

At a time when investment options in the field of electric vehicles are becoming more diverse, it is also important to know which companies have the highest chances of success and make sure that they do not pay too much for their stock.

Yaniv Aharon is the CEO and Chief Investment Officer at Ocean-Creation Investment House. Yoni Ben Moshe is the Director of Overseas Research at Ocean-Creation Investment House.
The above should not be construed as a recommendation for the performance of operations and / or investment advice and / or investment marketing and / or advice of any kind.
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