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One of the main goals of the Electric Vehicle (EV) industry is the protection of the environment. Decades of using various types of fuel have hurt the environment, playing a critical role in what is called “climate crisis.” As governments and institutions around the world scramble to reduce CO2 emissions that weigh on the atmosphere.

The EV industry has grown a lot in the last few years on the back of new environment-friendly policies. Experts suggest that the EV industry growth has been supported by investors who diversify their investment strategies as more and more people add green investments to their portfolios.

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A survey published by the clean energy research group BloombergNEF suggested that “annual investment in renewable energy, electrified transport and heat, energy storage and other technologies reached $1.1 trillion,” in 2022. Scrutinising the report, Times’ journalists wrote that “passenger EVs account for the bulk of the transport dollars invested ($380 billion) but by no means all of that sector’s capital flow last year. Public charging infrastructure saw an influx of $24 billion, while nearly $23 billion was spent on electric 2- and 3-wheelers. Electric buses got $15 billion, and commercial electric vehicles such as trucks received $8 billion.”

Our blog aims to give you an overview of the EV industry, how it has evolved and how EV investments gain ground as parts of investment portfolios.

The Beginning Of The EV Industry

Few of us may know that electric vehicles are older than gasoline-engine ones. According to the US Department of Energy, William Morrison, a chemist who came from Des Moines drove the first successful electric car in 1890. Henry Ford’s Model T turned the tide in favour of fossil-fueled vehicles for many decades until the protection of the environment became a requirement for most new legislation regarding economic activities.

By 2028, the battery electric vehicle (BEV) is expected to account for 60% of the electric vehicle industry's revenue. BEVs are supported by the Paris Climate Agreement to cut emissions and meet global climate goals. By 2040, Europe is expected to achieve 40% greenhouse gas reduction and net-zero by 2050.

How Much Is The EV Industry Worth?

A survey by Vantage Market Research showed that the total value of the EV industry was $195 billion in 2022. Market analysts suggest that the EV industry could be worth $693 billion by 2030, registering a Compound Annual Growth Rate (GAGR) of 17.3%.

Extrapolate shared a report indicating that in the first half of 2022, the overall number of electric vehicles sold was 4,000,000 more than in the first half of 2021, an increase of approximately 60%. The majority of electric vehicles are sold in China (62%), followed by the United States (15%) and Europe (20%).

What Are The Challenges For The EV Industry?

The Vantage Market Research survey suggests that more than 12 million new chargers will be needed globally by 2030. In the US, there are 1.5 million EVs while industry experts expect the number to reach 15 million by 2030. Stats suggest that India is the fastest-growing EV market with more than 1 million EVs on its roads but with only 1,700 chargers available across the country. Market analysts note that with the current pace of EV market expansion, more than 50% of the population will be living in areas where there won’t be fossil-fueled cars.

One more issue that torments the EV industry is batteries. It may sound like an oxymoron, but the range is a common problem for most EVs. Even though the majority of EVs have a fast-charging option that can reduce the time owners have to spend charging, the range depends on battery capacity and weather conditions. The EV industry has made great progress in the last few years to be able to compete with fossil-fueled cars but for many potential buyers, especially those living in remote areas, battery charging and range are important issues.

Who Are The Top EV Producers In The World?

What is interesting about electric vehicles is that it’s not the traditional car manufacturers that dominate the market. People who are not familiar with the EV industry would expect companies such as Mercedes, BMW, Fiat or General Motors for example to be the leaders. While traditional manufacturers add new EV models to their mainly fossil-fueled car lineups, there are companies that produce only EVs. Does Tesla ring a bell?

Tesla: An EV Synonym?

Tesla is one of the top EV producers in the world. Elon Musk became the company’s bigger shareholder in 2004 and served as CEO until 2008. According to Tesla’s website, its mission includes “building a world powered by solar energy, running on batteries and transported by electric vehicles.”

Tesla has more than 100,000 employees and seven production lines called “Gigafactories” in the US, China and Germany. The company has announced its plan to build one more Gigafactory in Mexico by 2025.

In a media statement published in January 2023, Tesla’s executives noted that new facilities in Nevada will include a 100 GWh battery cell factory, capable of producing battery cells for 2 million light duty vehicles annually.

Tesla’s stock fell 66% in 2022. On the contrary, Tesla’s shares rose by 60% in Q1 2023. The company implemented repeated price cuts in Europe, US and China in the first quarter of 2023, bringing Ford and GM into a difficult position, especially in the States.

BYD: The Chinese Answer In EVs

BYD is a Chinese car manufacturer based in Shenzen with more than 28 years of presence in the industry. BYD is one of the key players having 5 manufacturing plants in China, without adding the bus production lines in Hungary, Canada and Brazil.

In 2021, BYD revealed its modular car platform called “e-Platform 3.0”, to be used only for battery electric vehicles. The platform is free of design compromises that restricted the ability of previous hybrid drivetrains to perform as they ought. According to BYD, the platform “enables ranges exceeding 1,000 km (620 miles) through the world’s first 8-in-1 electric powertrain. In addition, the world’s first fast charging technology enables a range of up to 150 km (93 miles) after a 5-minute charging.”

While the suggested figures are quite good when compared to other platforms in the market, how does BYD perform in terms of sales? According to Yahoo Finance, “BYD delivered 1.86 million new-energy vehicles (electric and plug-in hybrids) in China and grabbed nearly 30% of all new-energy vehicle sales in the country.” Net income in 2022 soared 446% to 16.6 billion yuan ($2.4 billion), slightly higher than analysts’ expectations.

BYD is one of the largest battery producers in the world and has been listed at number 15 in Forbes’ list of companies changing the world.

Rivian: Smaller EV Manufacturer, But Backed By Amazon

Rivian isn’t as big as Tesla or BYD but, as Amazon is one of its backers, it is a force to be taken into consideration. Rivian raised $13.5 billion in its IPO at the end of 2021 and has a manufacturing plant in California. Rivian’s executives have revealed their plans to build one more plant in Georgia with a cost of around $5 billion.

In March 2022, Time magazine included Rivian in its “100 most influential companies of the year” list. Rivian and Amazon have signed an exclusive agreement as the car maker provides the company of Jeff Bezos with EV vans. However, media sources suggest that Rivian will seek to remove the exclusivity terms to be able to find more buyers for its vans.

How to invest in the EV industry

You might be interested in learning how to start investing in the electric vehicle (EV) industry now that you have some background knowledge about it.  In order to have access to the financial markets, the first thing you need to do is select a brokerage.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.