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The auto industry has been undergoing a massive transformation over the last decade. On one hand, new electric vehicle (EV) players disrupted the market, and on the other hand, the auto assembly chain and inventory sector suffered losses due to the COVID-19 crisis.
As we enter the new year, going green is the new worldwide anthem. Adapting to the new normal is also the need of the hour.
So which trends could influence further the automotive industry in 2021? We speculate below:
Autonomous Cars
The automotive industry has already started tapping the power of automation and technologies that could make a big difference to vehicles and parts developers. Though “automation” has been a catchword for some time now, companies have utilized it partially so far, making minor advancements in basic manufacturing procedures.
Auto giants have been brainstorming on how to embrace automation and incorporate it as a way of life. Some have made headways:
Apple Inc. (AAPL:US or NASDAQ: AAPL) is considering introducing its autonomous car by 2024, reports have suggested. If true, it will likely contract out its production, as it does with the iPhone.
With the help of Canada-United States-Mexico Agreement (CUSMA), Canada’s Magna International (TSX:MG) has emerged as on of the favorable candidates that could manufacture the self-driving cars for Apple. The Canadian auto manufacturer is already recommending tech groups and start-ups to join the automotive business.
Magna’s stock price has soared nearly 37 per cent in the last one year. It has a present market cap of C$ 27.6 billion. The company is also distributing a steady quarterly dividend of US$ 0.40 per unit, with present 3-year dividend growth of 11.82 as per TMX data.
@Kalkine Image 2021
Plugging Into The Future With Electric Vehicles
Electric cars have already been making buzz across the globe. EVs are one of the key developments of the 21st century. Investors have been betting big on green car stocks.
The Canadian EV manufacturer GreenPower Motor Company Inc. (TSXV:GPV) had a remarkable 2020. Its stocks are rallying with a massive one-year return of 1738 per cent.
Meanwhile, the China-based electric vehicle producer NIO Inc. (NIO:US or NYSE: NIO) market cap climbed over US$ 90 billion this week. Stocks of the EV maker have zoomed more than 1400 per cent in the last one year.
Giant electric car manufacturer Tesla Inc. (TSLA:US or NASDAQ: TSLA) has a market cap of over US$ 800 billion. Its scrips have returned over 663 per cent, driven by the electric vehicle enthusiast investors.
The mainstream automakers have also been exploring opportunities in electric cars. With governments worldwide pressing towards clean vehicles and zero-carbon emissions, we may soon see many players jumping into this segment.
The Canadian electric vehicle industry has flourished in recent times, supported by a wave of federal impetus. Canada has a robust green vehicle network comprising of battery manufacturing, electric train, and clean electricity generation.
EV Lithium Batteries
Lithium batteries have conventionally been used for portable electronic appliances. But recently, there’s been a massive demand from emerging electric vehicles.
EVs are set to take over traditional cars in terms of cost and efficiency. And hence, the demand for Li-ion based batteries will boom in the coming times.
Currently, it is not unusual for an EV to run 360-450 kilometers per charge. With the advancement of power density, these cars will be more powerful, more viable, and long-lasting.
On the back of the electric vehicle boom, lithium stocks on the Toronto Stock Exchange (TSX) and the TSX Venture are also on the investors’ radar. Stocks of Neo Lithium Corp (TSXV:NLC) have returned over 288 per cent in one year, driven by cost reduction in battery manufacturing and exceptional EV adoption. The stock holds a current price-to-cashflow of 29.40.
Units of American Lithium Corp. (TSXV: LI) have also added a nearly 610 per cent surge. The company explores and acquires Lithium deposits across North America.
Looking forward, the growth in lithium supply is likely to triple by 2025. That will push global lithium production to more than 1.5 million metric tons, as per the S&P Global outlook.
