Why is the electric car boom far from over? UBS gives three reasons

Mark Haefele, chief investment officer of UBS Global Wealth Management (UBS Global Wealth Management), said electric car stocks had been hit in the past few weeks as investors pulled out of technology and growth stocks with higher valuations, but that did not mean the end of the electric car boom.

Long-term changes in technology and the environment suggest that prosperity should continue. But UBS also acknowledged that fluctuations in individual companies' share prices suggest that investors should diversify.

Tesla (Tesla), owned by Elon Musk (Elon Musk), has led an incredible boom in electric vehicles over the past few years, according to data released by EV-volumes.com on Tuesday. In 2020 alone, electric vehicle sales grew by 43%, while overall car sales fell by 20%.

After 2020, the electric car market is growing rapidly, and now Tesla is only one of dozens of competitors in this rapidly expanding industry. In fact, a report by, Morgan Stanley found that Tesla's share of the US electric vehicle market fell from 81 per cent last year to 69 per cent in February.

As major American car companies say they will enter the electric car market, the electric car market is becoming more and more crowded.

GM (General Motors) recently pledged to invest $27 billion to launch 30 electric vehicles by 2025. The company also showed off some new cars, such as the electric Hummer, which will be launched in 2022. Ford (Ford) launched Mach-E, the Mustang that grabbed market share from Tesla. Volkswagen recently announced plans to build six "super factories" in Europe by 2030 to help its electric vehicle business.

Many analysts believe the electric car boom will continue. Wedbush's Dan Ives said in a recent report to customers that he believes "the party and transformation of the electric car industry has just begun, and the industry will have a $5,000bn market opportunity over the next decade."

Three major reasons

UBS agrees with Wedbush and gives three reasons:

1. Electric vehicles will continue to gain market share quickly. In 2020, the overall car market shrank by 15 per cent, but global electric vehicle sales grew by 43 per cent, with a market share of 4.2 per cent. This trend looks set to continue and will benefit pure electric carmakers, as well as traditional carmakers, who are adapting fastest to consumers' growing preferences for electric vehicles.

two。 Car electrification is still the "next big thing" of the automobile industry. Stricter emissions regulations mean there is no alternative to switching from fuel to electric engines-whether it's an all-electric (BEV), a plug-in hybrid ((PHEV)), or a fuel cell car (FCV). Traditional carmakers have also stepped in, such as Volkswagen (Volkswagen), which has pledged to invest more than 50 billion euros in electric vehicle strategy to catch up with Tesla.

3. The transformation under way in the auto industry is not just about power systems. We are seeing technological progress in this area, while consumer preferences are shifting from ownership. On the technical side, driven by the 5G network, self-driving and other areas are making progress. On the issue of ownership, the increase of mobile connections and the change of preferences of young people have led to the rise of car-sharing mode.

In other words, using a car no longer means owning a car in the future. Overall, UBS expects potential sales related to the "intelligent transportation" theme to reach $400 billion by 2025, of which electrification accounts for more than half, eight to nine times the current level.