Mercedes-Benz, dynaCERT, BYD – Crisis or opportunity: the transformation of the automotive industry

Mercedes-Benz - Sales figures are falling

Mercedes-Benz is facing challenges in its electric vehicle policy and has adjusted its original electric car targets. The Company only foresees a 50% share of e-vehicles and hybrids by 2030, instead of full electrification as originally targeted. This adjustment reflects current market conditions and customer preferences, although the Company continues to invest in high-tech combustion engines. The strategic realignment also comes in the face of a challenging market environment, particularly in the Chinese luxury segment, which tends to favour electrified combustion engines, thus dampening demand for electric vehicles.

In the third quarter, Mercedes-Benz recorded a slight decline in vehicle deliveries. A total of 594,600 vehicles were sold, a year-on-year decrease of 3%. The Chinese market was particularly affected, with sales falling by 13%. Sales of pure electric vehicles fell by 31% worldwide. Despite persistently challenging demand, sales of plug-in hybrids in the US developed positively and recorded increasing numbers, underscoring the Company's ambivalent market position.

The EU is considering imposing additional tariffs due to significant subsidies for Chinese electric vehicles, which could increase competitive pressure on European manufacturers such as Mercedes-Benz. However, Ola Källenius, CEO of Mercedes-Benz, is against increased tariffs. While a complete switch to electric mobility by 2030 was previously assumed, the Company is now also planning to continue developing hybrid vehicles. Analysts remain optimistic, nevertheless. The average target price of 82 analysts is EUR 89.23, which indicates significant upside potential at the current price of EUR 57.55.

dynaCERT – Milestone: Verra Certification

Combating diesel engine emissions is one of the biggest challenges in the transportation industry. This is where the Canadian company dynaCERT comes in, offering an innovative retrofit solution with its HydraGEN™ technology. This technology uses electrolysis to split water into hydrogen and oxygen, which are then added to the combustion process. This optimizes fuel combustion and reduces pollutant emissions while also achieving fuel savings. This technology could be retrofitted to a significant portion of the estimated 30 to 50 million diesel trucks in use worldwide.

dynaCERT has gained a decisive advantage with the recent VERRA certification. This certification confirms the effectiveness of HydraGEN™ technology in terms of CO2 reduction and enables the Company to generate and market emission certificates. The certification will significantly ease access to fleet operators. Especially since the HydraGEN™ technology offers both dynaCERT and its customers an additional source of income, as they can benefit financially from the sale of these certificates. Companies that equip their diesel fleets with HydraGEN™ not only come closer to their sustainability goals but also improve their marketing and save money through optimized fuel consumption and the associated extension of the service life of diesel engines.

With the increasing political and social focus on reducing emissions, dynaCERT has a promising future. The Company has a production capacity of 6,000 units per month in Toronto and expects demand to increase, particularly from fleet operators and the mining sector. Successful positioning in the emissions certificates market and a focus on growth through hiring experienced managers, such as Bernd Krüper, are laying the foundation for dynamic development. Initial orders and positive market trends could quickly increase sales potential and create new investment opportunities. The share price, which shot up to CAS 0.29 after the announcement, is currently consolidating at CAD 0.225.

BYD – Defies punitive tariffs and raises annual target

Despite ongoing trade conflicts and punitive tariffs on Chinese vehicles in the US and Europe, Chinese automotive giant BYD optimistically raised its annual sales forecast to 4 million vehicles in September. While Western carmakers are struggling with various problems, such as weakening demand, BYD is simply growing. This increase is partly due to rising demand for plug-in hybrids (PHEVs). Since the announcement, investors have been enthusiastic as BYD also benefits from the economic stimulus measures recently announced in China.

In September 2024, BYD sold a total of 419,426 New Energy Vehicles (NEVs), an increase of 46% over the previous year. There was a notable increase in plug-in hybrid sales, which rose by 86% to over 252,000 units. Purely electric vehicles also found numerous buyers, with 164,956 units sold. Added to this is the new model, the Seal 06 GT, which will be launched on October 18. This sporty electric hatchback will expand the product range and relies on powerful engines and modern technology.

BYD's impressive sales performance shows that the Company can continue to convince despite international trade barriers. The positive market development and innovative model releases such as the Seal 06 GT underscore the growth potential that makes BYD attractive to investors. The combination of rising domestic demand and planned exports despite high import tariffs could ensure even higher sales in the future. In view of these factors, BYD remains an exciting candidate for growth-oriented investors. Nevertheless, one should first wait for a more significant setback, as the stock has gained a good 50% since the end of August. Currently, the share is trading at EUR 35.12.

The automotive industry is undergoing a transformation, and companies like Mercedes-Benz, dynaCERT, and BYD are facing challenges and opportunities. Mercedes-Benz is facing declining sales figures, is adapting its electric strategy, and continues to invest in hybrid technologies, reflecting the ambivalent market. dynaCERT offers an innovative solution for reducing emissions from diesel vehicles with its certified HydraGEN™ technology and is strategically positioning itself in the emission certificates market. BYD, on the other hand, is defying international trade barriers and is optimistic about achieving its annual target, supported by strong demand for plug-in hybrids and new model innovations. Overall, these companies are taking different approaches in the face of changes in the automotive industry, but they all agree on one thing: they want to reduce emissions.