UK July car production touches 1956 lows. Should you hold these 3 stocks?

Highlights 

  • Auto industry body, the Society of Motor Manufacturers and Traders announced July’s car production dropped by 37.6 per cent to 53,400 vehicles from July 2020
  • The fall was due to a persisting chip shortage being faced by the auto industry and pingdemic induced staff absences.

UK car production fell to 53,400 vehicles in July, falling sharply by 37.6 per cent from July 2020, according to the latest data from auto industry body, the Society of Motor Manufacturers and Traders (SMMT).

It is also the lowest July output recorded in the UK since 1956 due to an ongoing global scarcity in semiconductor chips and pingdemic induced staff absences.

The auto sector has faced an industry wide shortage of computer chips for the past many months, and it is expected to persist in the next year as well. Whereas, the NHS’ covid tracking healthcare app set off pings forcing more and more workers to self-isolate after coming into contact with a covid positive individual, thus causing staff absences.

However, lower output also had a domino effect of increasing electric and hybrid car sales accounting for 26 per cent of all car production in the UK, according to the SMMT.

In view of this, let us take a look at the top 5 FTSE listed electric vehicle stocks and how they have performed:

  1. Aston Martin Lagonda Global Holdings PLC (LON: AML)

FTSE 250 index listed firm Aston Martin is a UK based luxury auto manufacturer. It recently announced it would launch its first electric vehicle in 2026 and it could be an upgraded version of the DB11 model.

The company also anticipates at least 50 per cent of its fleet to be electric powered by 2030.

(Image Source: Refinitiv)

Aston Martin’s shares were trading at GBX 1,920.50, down by 1.23 per cent on 26 August at 08:24 AM GMT+1, while the FTSE 250 index was at 23,903.87, down by 0.34 per cent.

The company’s market cap is at £ 2,259.69 million, and its one-year return stands at 68.76 per cent as of 26 August.

Related Article: How Aston Martin’s EV Push Can Boost Its Stock Performance

  1. Royal Dutch Shell Plc (LON: RDSA)

FTSE 100 index constituent Royal Dutch Shell is an oil and gas major; however the company has recently forayed into setting up charging point infrastructure, having announced its acquisition of EV charging network company Ubitricity earlier this year.

It recently announced its first EV mobility hub based in Paris with 8 rapid chargers and is aimed at boosting uptake of EV and charging infrastructure in the area. The second hub in Charles de Gaulle Airport is set to be operational by end of this year.

 (Image Source: Refinitiv)

Royal Dutch Shell’s shares were trading at GBX 1,426.20, down by 0.43 per cent on 26 August at 08:35 AM GMT+1, while the FTSE 100 index was at 7,122.10, down by 0.39 per cent.

The company’s market cap is at £2,259.69 million, and its one-year return stands at 68.76 per cent as of 26 August.

  1. Rolls Royce Holdings PLC (LON: RR.)

Another FTSE 100 index constituent Rolls Royce is an ultra-luxury car brand and aerospace engine maker. The company recently announced that its first EV, which will be the most luxurious electric car in the world, will be called Silent Shadow.

It also recently reported its H1 2021 results, reporting a return to profits due to improving profits from continuing operations and cash flow. Its underlying operating profit stood at £307 million, up from a loss of £1.630 billion in H1 2020.

Rolls Royce’s shares were trading at GBX 115.16, down by 1.13 per cent on 26 August at 08:46 AM GMT+1. The company’s market cap is at £ 9,746.58 million, and its one-year return stands at 26.36 per cent as of 26 August.

Related Article: 5 FTSE electric vehicle stocks to buy in August

Bottom Line

Electric vehicles are set to boom in the coming years, especially after the UK mandated fossil fuel powered vehicles will be banned by 2030 in order to meet its net zero targets.

While Tesla has dominated the EV space so far, several legacy automakers, tech giants and oil and gas companies have made plans to foray into the sector.

While the pingdemic related staff absences may be a shorter-term impact, the chip shortage will continue to impact the sector, dampening output despite increased demand.

 

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