eResearch | This past decade, the auto industry expedited its growth as innovative companies such as Tesla Inc. (NASDAQ: TSLA) surged demand for electric vehicles, forcing mature industry leaders such as General Motors Company (NYSE: GM) to focus more on R&D and make new investments.
Global Electric Mobility Market
As governments incentivize electric mobility and consumers seek sustainable sources of energy, the Electric Mobility industry has grown to include Electric Vehicles (“EV”), Electric Scooters & Motorcycles, Electric Skateboards, and Electric Bicycles.
According to KBV Research, the Global Electric Mobility Market is forecasted to grow to US$478.9 billion by 2025 with a 24.7% CAGR from 2019-2025.
Tesla Update
Tesla, a leader in the EV industry, saw volatility in its stock price this year but ended the year with its stock price at an all-time high as the EV and solar energy company maintained vehicle deliveries while rolling out new revenue streams such as its autonomous driving software feature add-ons.
At the end of 2019, Tesla continued to report positive news as its Model 3 vehicles started deliveries from its Shanghai factory and aims to produce 250,000 EVs per year. In addition, Tesla also announced a US$1.4 billion five-year loan for its Shanghai factory, syndicated through multiple Chinese banks, which will partially be used to roll over an existing loan to a new interest rate pegged at 90% of China’s one-year benchmark interest rate.
Tesla’s New Cyber Pick-up Truck
Although Tesla experienced many successes this year, it also had a few setbacks. Tesla recently failed a product shatterproof window demonstration as a metal ball cracked the window of its new cyber pick-up truck, which is already up in debate for its design. In addition, the National Highway Traffic Safety Administration (NHTSA) is currently investigating multiple accidents after drivers had accidents while using Telsa’s Autopilot, its software for autonomous driving. Most recently, two people were killed in Los Angeles after a Tesla collided with a Honda Civic.
General Motors and LG Chem Plan to Open New Battery Plant
General Motors expansion into the EV vertical is growing as it recently announced a US$2.3 billion joint venture with South Korea’s LG Chem Ltd. (KRX: 051910), the 10th largest chemical company in the world. The companies plan to develop one of the world’s largest EV battery cell plants in Ohio.
Lordstown Motors – a New EV Truck Company
As General Motors focuses on the development of the new battery plant, it sold its older production facility in Ohio to Lordstown Motors, a start-up EV company who plans to launch its electric pick-up truck, called Endurance, in 2020.
Lordstown Motors’ Endurance – a New Electric Pick-Up Truck
As the Electric Mobility market grows, more and more start-ups are disrupting the transportation industry which once had a large barrier to entry. It will be interesting to see what kind of new products and services other starts-ups create as new niche opportunities arise in the EV industry.
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1-Year Comparison Chart – S&P 500 (+23.9%) Versus Tesla (+28.6%) and GM (-3.3%)
