eResearch | The electric vehicle (“EV”) industry has surged in the past five years as countries around the world implemented various subsidies and policies to promote the purchase of EVs. This decade is expected to be significant for EVs with multiple catalysts.
According to Acumen Research and Consulting, the EV industry is expected to reach US$567.2 billion by 2026 at a CAGR of 25.6%, stimulated by governments pushing towards environmental sustainability and vehicle manufacturers developing more efficient and affordable EVs.
Below is a summary of highlights for the EV industry this past week.
Tesla Q4/2019 Earnings
Last week, Tesla, Inc. (NASDAQ: TSLA) released its Q4/2019 financials and reported $2.14 in earnings per share beating S&P Capital IQ consensus estimates of $1.75 per share.
Tesla reported revenues of US$7.4 billion, a 2.2% increase year-over-year, stimulated by the 112,000 EVs it delivered, which brought total annual deliveries to 367,500 for 2019, reaching its pledged goal of 360,000 deliveries.
Operating expenses only increased by 0.2% as R&D expenses were reduced by 3.2% and Tesla delivered on its promise of profitability as its cash flows for Q4/2019 was above US$1 billion, with 4 out of its last 5 quarters reporting positive earnings.
Tesla announced that its European Giga factory will be located in Berlin-Brandenburg, Germany, due to its superior automobile manufacturing and engineering history, with deliveries expected to start in 2021.
Tesla’s only set back was due to an outlier event related to the deadly coronavirus, which delayed Model 3 production at Tesla’s facilities in Shanghai by 1.5 weeks. Since Tesla’s business in China is still in its infant stages, effects on profits is expected to be small.
GM Invests $2.2B into EVs
Early this week, General Motors Company (NYSE: GM) announced that it would spend US$2.2 billion to refurbish an underused factory in Detroit for producing electric and autonomous vehicles, with 2,200 expected employment opportunities. GM also will invest an additional US$800 million for parts suppliers and other EV related initiatives.
The factory being refurbished in Detroit was one of four factories that were announced to be closed last year, but GM made a promise after negotiating with the United Auto Workers union that the Detroit-Hamtramck facility will continue operations after being retrofitted for EV production.
This will be GM’s first production facility dedicated solely to EVs, with the release of its first electric pickup truck expected in 2021.
UPS Puts in Order for 10,000 EVs
Last week, UPS purchased 10,000 EVs from the company Arrival, a London based technology company who has a vision of bringing EVs to mainstream adoption through its fleet of electric vans. Deliveries are expected to start in the second half of this year with the rest of the vehicles delivered throughout the next 5 years.
UPS Ventures, UPS’ investment arm will also invest a minority position into Arrival with UPS receiving priority access for additional EVs, contingent on a successful pilot.
UPS also announced a partnership with Waymo, Google’s self-driving unit, to test autonomous package pickups in Phoenix, Arizona.
There remains a large amount of vehicles in the world that still run on fossil fuels, which are eventually going to be turned over for more efficient and environmentally friendly EVs. It will be interesting to see if Tesla can hold its lead in the EV race as other large companies start investing into the industry.
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