16. July 2021 | 14:02 CET
BYD, EuroSports Global, VW - Electric mobility booming
Automakers enjoyed their best first quarter in 10 years. One reason for this is the growing number of registered electric cars. If you compare the first quarter of 2020 in Germany with 2021, you can see an increase of 173% in the registration of e-cars, and there is no end in sight. However, more e-cars are not only being sold in Germany; but sales are also increasing worldwide. According to Handelsblatt, if the boom continues, there will be a shortage of millions of battery cells for production. The current industry leader, Tesla, still leads the ranking with the most e-cars delivered by brand, but the competition is catching up. Therefore, we take a look at three companies from the e-mobility segment.
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ISIN: BYD CO. LTD H YC 1 | CNE100000296 , EuroSports Global | SG2G55000001 , VOLKSWAGEN AG VZO O.N. | DE0007664039
BYD - Independence is the trump card
BYD has evolved from a battery manufacturer to a major player in e-mobility. The Company's advantage lies in the fact that it has both battery production and manufactures the chips itself for cars. This independence is likely to be the envy of the competition, given the current chip crisis. On June 30, the Company filed an application for a spin-off for the semiconductor division "BYD Semiconductor" with the Shenzhen Stock Exchange.
The Group publishes its sales figures monthly, and they were again very convincing year-on-year. Passenger car sales figures in the hybrid and e-car segments more than tripled. Sales of commercial vehicles with e-drives also rose by 13%. If we take the entire half-year as a comparison, 159% more passenger cars and 35% more commercial vehicles were sold. The trend is expected to continue, especially as the Company tries to gain a foothold in Europe for the first time.
The stock broke its downtrend on June 1, rising from 140 Hong Kong dollars (HKD) to HKD 240. Even the sales of Cathie Wood at the end of June could not stop the upward trend. Most recently, the stock weakened somewhat as Himalaya Capital dumped over 10.7 million shares on the market. After a 70% rally, there may well be a setback. Since June 17, the stock has been in a sliding zone between HKD 205 and HKD 240. Should the zone be exited to the downside, the next support level is at HKD 186.
EuroSports Global - On the way to becoming an e-motorcycle manufacturer
EuroSports Global is based in Singapore. Its original business is the distribution of luxury sports cars. Together with its 75%-owned subsidiary Scorpio Electric Ltd, the Company has established another business, the production of electric motorcycles. Instead of dealing with a lot of competition in e-cars, it is taking on two-wheelers. A smart move, considering that 65% of all motorcycles in the world are ridden in Asia. Technology, design and performance are the values according to which the first Scorpio X model has been designed. The launch of the first models is scheduled for the end of the year.
Compared with competitors such as Vespa or NIU, Scorpio scores in terms of speed and range. In terms of design, it also stands out clearly from the competition and is strongly reminiscent of a futuristic motorcycle, in contrast to the scooter design of the other manufacturers. As an add-on, the motorcycle can be started via an app. It offers data on the vehicle status, can locate the vehicle and send a notification to emergency contacts in case of an accident. Information is collected and analyzed using artificial intelligence. In the event of danger, the driver can thus be notified, the vehicle status is monitored, and ultimately the performance is to be optimized depending on the route to get the most out of the two-wheeler.
The secure core business with the luxury car trade can help finance the development. Due to the lockdown, luxury car sales were temporarily at zero. The market for e-motorcycles is expected to grow to USD 12 billion by 2025, and EuroSports Global wants a piece of that. The market capitalization is around SGD 67 million. Those who want to get involved in the e-motorcycle sector early have an opportunity here.
VW - Synergies through a platform approach
On July 13, CEO Herbert Diess presented the new Group strategy under the slogan: New Auto. The Group's boss reiterated that VW intends to push ahead with its transformation into a software-driven mobility company with all its might. The focus is on becoming the world market leader in electric vehicles. In addition, the Company wants to be climate-neutral by 2050. The interim targets for 2030 are a 30% reduction in CO2 emissions and zero-emission vehicles by 2040.
By 2025, the Company aims to generate 1% more profit than before from sales. It is hoped to achieve an EBITDA of 8% to 9%. That should be realized through the shift to more e-cars, as margins are higher here. CFO Antlitz said, "We will scale our BEV platforms, we want to develop a leading automotive stack, and we will continue to invest in autonomous driving and mobility services". That aptly describes the four business areas of the future.
With the major upheaval in the automotive industry, VW wants to establish as many synergies as possible between the different brands and product areas via a common platform. Looking at the share, it was unable to keep pace with the DAX. It was not granted a new high. Currently, it has formed a double bottom at around EUR 198 and has pushed off there. Unless this mark breaks, the high from June should be tested. Both JPMorgan at EUR 245 and RBC with a target price of EUR 300 see the share's value significantly higher.
All three companies operate in a growth market that offers many opportunities. BYD and VW are fighting against Tesla, currently still the benchmark in the automotive market. VW has considerable market power with its Group, whereas BYD is still small but can already operate independently. EuroSports Global occupies a smaller niche, but motorcycles are in high demand in Asia, and there is no top dog in this segment that needs to be displaced first.