28. June 2021 | 14:42 CET
BYD, EuroSports Global, Varta - Electric music is playing in Asia
Electromobility is considered the central building block of a sustainable and climate-friendly transportation system based on renewable energies. There are currently around 70 electric vehicle models from German manufacturers on the market. In 2020, the stock of passenger cars with electric drives in Germany comprised only 137,000 vehicles, according to the Federal Motor Transport Authority. The federal government wants to significantly boost the market with purchase incentives by the end of 2025, extensive investments in expanding the charging infrastructure and tax incentives. However, if you look at the global situation, it quickly becomes evident that Asia dominates the action. We introduce you to three stocks that offer great opportunities. Who has the best cards?
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ISIN: BYD CO. LTD H YC 1 | CNE100000296 , EuroSports Global | SG2G55000001 , VARTA AG O.N. | DE000A0TGJ55
BYD CO LTD - Impressive expansion mode
BYD (Build Your Dreams) is one of the world's leading battery and accumulator manufacturers. The Chinese have both their own manufacturing of batteries and a chip division. This diversified setup helped enormously when the conveyor belts at competitors recently had to stand still because of the chip shortage. But BYD is also superior in terms of vehicle range. The platform unveiled in the spring presented so-called blade batteries from its production with which ranges of over 1,000km can be achieved.
The Chinese have been active in Europe for some time with electrically powered buses and coaches and continuously report major orders. BYD is pushing its international expansion with zero-emission vehicles. According to a recent company announcement, sales of electric buses are now to be expanded in Japan. But the group also recently set its sights on the European market for electric cars and is initially attacking in Norway. This summer, the Tang SUV will be available at dealerships in Norway for the equivalent of USD 72,400. The Company is thus attacking NIO and XPeng. BYD is a serious player on the market and strategically positioned to benefit from the potential of e-mobility. That should also make shareholders happy.
EUROSPORTS GLOBAL LIMITED - Firmly anchored in the luxury segment
Most of the public discussion on the subject of electromobility revolves around the car. Partly, e-bikes or e-scooters are discussed, but one area largely left out is the e-motorcycle. Experts predict that the market for e-motorcycles will grow to around USD 10 billion in the next four to five years. One issue that generally poses a challenge for the industry is the charging infrastructure and the standardization of batteries. Here, four renowned players have recently joined forces and forged an alliance. KTM, Piaggio, Honda and Yamaha, want to develop standardized batteries for electric motorcycles and small vehicles. The quartet from Austria, Italy and Japan is forming a consortium to define the specifications for a swappable battery system for the so-called L category, which includes mopeds, motorcycles, trikes and quads.
While Ducati has given a clear rejection to the topic of e-motorcycles, another company is sharpening its hooves and has ambitions to become a global brand. It is Scorpio Electric Ltd., a 75% subsidiary of the Singaporean EuroSports Global and specializes in producing high-performance electric motorcycles. Earlier this year, the Company unveiled the Model X. This is the first of many prototypes that the Company will gradually take into mass production. Design, safety, efficiency and maximum comfort - that is what the Company is all about. A strong USP is also an app that enables a better customer experience. Examples include keyless entry, vehicle status information and vehicle localization. With the Model X, the Company competes against rivals such as Vespa, Super Soco, NIU or Etergo, but is likely to be ahead in several places in the category (>100km/h, range >200 km).
The core business of the listed parent Company EuroSports Global remains the distribution of ultra-luxury automobiles and related services. The group's long-term goal is to expand into other businesses in the luxury segment. EuroSports Global currently has a market value of SGD 69 million or the equivalent of EUR 43 million at a price per share of SGD 0.26. Access to a clientele with strong purchasing power is a major plus. As a result, the Company and the share price should also benefit from rising demand and sales figures for e-motorcycles. But also the further diversification into other high-priced business areas should give it wings.
VARTA AG - Mixed feelings
The further development of electromobility is a forward-looking topic for German industry. As Varta announced a few months ago, it also wants to get involved in the battery business for cars. So far, the core competence of the southern German Company has been in micro-batteries, which are used in headphones, among other things. The market is eagerly awaiting concrete information on the new growth area. Two pieces of news in the last few days evoked very different feelings among shareholders.
First, the news that Porsche was cooperating with battery company Customcells put pressure on the mood of Varta shareholders. The sports car manufacturer wants to produce high-performance battery cells on a small scale together with its partner. Porsche is said to have a majority stake of 83.75% in the new Cellforce Group joint venture, with Customcells holding the remainder. But Varta shareholders could also rejoice elsewhere. The group announced that Varta would supply the VW subsidiary Porsche with the so-called V4Drive battery in the future. Varta shares are currently trading at around EUR 138, and the Company is thus valued at EUR 5.7 billion.