The take-off of the electric car is changing the landscape of the automotive sector. Manufacturers that have just put their first cars on the market, such as Rivian or Lucid, have managed to outperform giants such as Volkswagen and Ford by market capitalization, while motor giants strive to launch electrified models and seal joint ventures with start-ups in the sector. to compete in a market that aspires to achieve the definitive takeoff in the coming years.
Rivian has become the largest IPO of the year. The electric truck maker raised $ 13.7 billion and managed to reach a valuation of $ 100 billion, even surpassing Volkswagen’s market capitalization.
Beyond Rivian, electric car makers have posted a high-flying year on the stock market. Tesla has appreciated 53.3% since January, despite the ups and downs caused by its controversial founder, Elon Musk. In turn, the ADRs listed on the Wall Street of the Chinese electric car manufacturer NIO are down 17.95%, while Lucid soars 416.68% and has come to surpass Ford by valuation (78,925.8 million of dollars). The company, which debuted on the stock market last July through its merger with a SPAC, has just delivered its first vehicles, although it has a significant investor in its shareholding. The sovereign wealth fund of Saudi Arabia invested 2.9 billion dollars in 2018 in the company.
Bank of America believes that the electrification of the automotive sector will continue to cause a furor in the stock markets, where it estimates that companies in the sector will raise up to $ 100 billion by the end of 2023 with different IPOs.
Some forecasts that are faced with the voices of those who point to an overvaluation in the titles of Tesla, Rivian or Lucid and that are also mixed with the little interest that the new companies in the sector are having that make their debut in the market on the part of the large funds, and by the analysis houses.
The rebound in demand for electrified vehicles will have an effect on the entire value chain and especially among manufacturers of electric batteries. It is estimated that the manufacturers of electric batteries will have to undertake investments to triple their manufacturing capacity in 2022 in order to meet their supply commitments. One of those companies is the Chinese BYD, which has skyrocketed 46.18% so far this year. Among its investors is the investor Warren Buffett, who bought a package of 225 million shares in 2008.
Small electric car manufacturers will also have to compete with the big giants in the sector. General Motors, Ford or Stellantis have come to commit with the US Government so that between 40% and 50% of their sales in 2030 will be electrified cars. A boost that will involve an investment of more than 330,000 million dollars in the next five years to cover a rebound in demand that is estimated at sales of 234,000 million electrified cars by 2030.
The premieres to come
LG Energy Solution. LG’s battery division will go public at the end of the year, market turmoil permitting, in South Korea. A premiere that is expected to raise 10 billion dollars.
NIkola. The manufacturer of electric cars and fuel cells has not managed to join the increases in the sector. So far this year it has fallen by 31.45%, weighed down by doubts about its founder, Trevor Milton, accused of criminal fraud. The company was one of the most anticipated IPOs of the 2020 financial year, when it reached a valuation of 31,000 million dollars in its first days on the market.