EV market trends 2022
The global electric vehicle (EV) market grew this year amid the increased roll-out of policies designed to cut emissions.
With attention focused on meeting the global net-zero emission target, developed countries are increasing their investment in electrification programmes and related charging infrastructure. One piece of national legislation to have boosted optimism around the EV industry is the US Infrastructure Deal.
US President Joe Biden signed the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act) into law in November. Under this once-in-a-generation bill, the US government will invest $7.5bn to build a national network of 500,000 EV chargers and support the president’s goal “to accelerate the adoption of EVs, reduce emissions, improve air quality, and create good-paying jobs across the country”.
If you’re interested in electric car stocks, read this article to learn more about the recent development in the electric car industry, including the market outlook and the performance of electric vehicle stocks.
EV market outlook 2022 and beyond
According to the Global Electric Vehicle Market report published by research consultancy MarketsandMarkets, the EV market size is expected at 4.1 million units in 2021. It will grow at a compound annual growth rate (CAGR) of 26.8%, reaching 34.8 million units by 2030.
Other forecasts are even more bullish. The International Energy Agency’s forecast suggests that global EV stock (excluding two and three-wheelers) will reach 145 million units by 2030, and EVs will account for 7% of the global vehicle fleet. And the EV30@30 campaign – which aims to reach a 30% sales share for EVs by 2030 – is being backed by the governments of Canada, China, Finland, France, India, Japan, Mexico, the Netherlands, Norway and Sweden.
To date, sales figures look promising, despite manufacturing constraints caused by the semiconductor shortages. Global battery electric vehicle (BEV) sales in the first nine months of this year have surpassed 4 million, and the BEV market-share is growing rapidly.
Citing Jose Pontes/EV-Volumes data, industry news provider Inside EVs wrote that global battery BEV sales rose to 4.25 million units in the first three quarters of 2021.
In January to September 2021, the top five car makers by sales volume are Tesla, SAIC, Volkswagen Group, BYD and Hyundai Motor Group. These five car makers accounted for 56.9% of the total BEV sales during the first nine months this year.
EV sales in the EU, the second biggest EV market after China, have jumped this year following government stimuli for zero-emission vehicles. According to data from industry body the European Automobile Manufacturers’ Association (ACEA), BEV sales reached 569,056 units in January to September this year. EV car registrations stood at 146,185 in the first quarter, 210,298 in the second quarter and 212,582 in the third quarter.
In China, the number of new EVs reached 6.78m units, of which 5.52 million are BEV, CAAM data shows.
What is your sentiment on TSLA?
EV stocks to watch
As the world’s top seller, Tesla is consistently highlighted as one of the EV stocks to watch. However, analysts have also cited other companies which did not make the top five list as potentially good investments.
To many investors, Tesla is synonymous with EV, said Washington-based business forecasts and financial advisor Kiplinger.
Tesla’s strong performance this year has made market headlines as higher vehicle sales lifted its stock prices and boosted the company’s market capitalisation above $1trn in late October.
Tesla share prices have surged this year, starting at $729.77 a share at the beginning of the year, the price spiked to a peak of $1,243.49 on 4 November. The price has since dropped, and was at $1,003.80 at the time of writing, on 9 December, – 42% above its January price.
The share has a ‘moderate buy’ analysts’ consensus on market stock comparison site Tip Ranks.
Despite the strong performance this year, “investors are valuing [Tesla] like a high-flying tech startup. And perhaps that's reasonable given the company's leadership in battery technology and autonomous driving. But Tesla is expensive even by tech stock standards,” said Kiplinger.
While investment guide website The Motley Fool also warned that the company, like other car makers, is equally susceptible to supply-chain issues such as the global semiconductor shortages, logistics delay etc.
Chinese EV maker NIO was founded in November 2014. The Shanghai-based company is focused on the Chinese SUV market.
To date, NIO has delivered 80,940 vehicles in 2021, up 120% year-on-year, the company said. While subsidies from the Chinese government have given NIO some price advantage in its domestic market.
Nonetheless, NIO share prices have lost value compared to the beginning of the year, when it was at $53.49 a share. It was down 35% to $34.05 on 9 December. Although NIO share prices did rise above $60 briefly in February, prices have been in a downtrend for most of this year.
The share has a “strong buy” analyst consensus on market stock comparison site Tip Ranks.
Xiaopeng Motors, commonly known as Xpeng, is a Chinese EV maker based in Guangzhou, China. The company targets the technology-savvy middle-class consumers in China and, like Tesla, is developing autonomous driving technology.
Xpeng delivered 82,155 vehicles from January to November this year, up 285% year-on-year. The company’s smart sports sedan P7 model accounted for 65% of total sales.
“Its models are still relatively unknown in the United States, but the company's G3 SUV and P7 sedan are best sellers in China. And significantly, the P7 boasts a 440-mile range on a single charge,” said Kiplinger.
Like many EV makers, the company remained in financial loss and the unaudited result showed a net loss of RMB1,595bn ($250m) inXpeng delivered this year.
The company was listed on the New York Stock Exchange (NYSE) in August last year. Xpeng’s current share price is around double the $23.10 a share when it first listed in 2021. Xpeng’s share price started the year at $44.10, and surged to a high of $60.04 on 25 January. It has since dropped to below $50. It was trading at $46.13 on 9 December.
The share has a “strong buy” analysts’ consensus on market stock comparison site Tip Ranks.
When considering whether to invest in the company’s stock, you should always do your own research, considering the outlook and relevant market conditions. A number of factors dictate whether stock prices rise or fall, including the company’s fundamentals and broader macro-economic factors. There are no guarantees. Markets are volatile. You should conduct your own analysis, taking in such things as the environment in which it trades and your risk tolerance. And never invest money that you cannot afford to lose.
Are EV stocks a good investment?
EV sales are expected to rise as many developed countries implement policies to meet its net-zero emission targets by 2030. However, like other automakers, EV manufacturers face supply-chain issues such as semiconductor shortages, logistical delays and high battery raw material prices. Battery raw material such as lithium, cobalt, nickel prices have remained high and volatility in prices could affect EV makers’ margin.
Whether EV stocks are good investments for you or not depends on your investing goals and portfolio composition. You should do your own research and never invest what you cannot afford to lose.
What is the future of the EV market?
The future of the EV market is set to grow, with forecasts varying. Government subsidies and policies are expected to support EV sales in many countries. But market-share remained relatively small compared to internal combustion vehicles (ICE).