3 EV Investment Opportunities from The UK Stock Market

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Summary

  • The EV market is maturing rapidly, and private players are now seizing the EV investment opportunity.
  • There are many EV sector stocks that have doubled the investors’ money in no time.
  • These stocks provide with an excellent opportunity to create wealth in the long-term. 

The global automotive industry, including UK is chalking out plans to make EV mobility solutions a success. UK aims to make EV infrastructure ready by 2024. Considering the evolving present scenario, a majority of people looking to buy new cars are contemplating EVs (Electric vehicles). In recent months, UK has been partnering with private groups to take part in building EV charging stations.

By 2030, the sale of combustion engine cars (gasoline & diesel) would not be allowed, as announced by the British government in November 2020. In addition, the British government has approved £1.8 billion for EV infrastructure projects and grants.

Global automakers such as Tesla and Nio are leading the change. Meanwhile, Daimler AG unveiled its flagship electric car recently. Overall, the competition is getting fierce in the segment as global manufacturers are pitching in. Overall, the EV market is maturing rapidly, and private players are now seizing the EV investment opportunity to derive growth in the future.

New technology means not only a new investment for businesses, but also for stock market investors. In this article, we would put our lens through some stocks which are directly / indirectly related to the EV market and might be an excellent opportunity for investors seeking capital appreciation.

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Also read: Electric Vehicles Then & Now: Tracing The Near 200-Year History

Scottish Mortgage Investment Trust (LON: SMT)

FTSE 100 listed fund, Scottish Mortgage Investment Trust, has a knack for investing in some exciting new businesses such as EVs that present deep competitive advantages and growth opportunities. During the first half of the financial year 2021, the Company has delivered a higher gain on investment, which resulted in significantly higher net return/ ordinary share.

Driven by higher net return, the Company proposed a higher dividend of 1.45 pence per share for H1 2021 as compared to the same period previous year. The Company’s cash position increased significantly to £77,956 thousand as on 30 September 2020, along with well-positioned balance sheet. SMT has more than doubled the investors’ money in the past one year and has a market capitalization of around £17,470 million.

Johnson Matthey (LON: JMAT)

One of the major chemical company, Johnson Matthey group operating performance for 2021is likely to be around the higher end of market expectations. Despite a backdrop of higher average precious metal prices, the company has managed to keep its net debt under £850 million and leverage ratio below its target range of 1.5 to 2 times. The company is directing its cash flow from more established businesses to new green technologies that will facilitate decarbonization and sustainability such as battery materials and hydrogen technologies.

The company’s new markets division specializes in designing battery materials and fuel cell technologies for the automotive sector. In battery materials, the company is on track to roll out its first commercial plant that develops high nickel cathode material, eLNO. The company is also developing fuel cells technology and expects a 20 per cent upside in its sales for the full year. The company has entered into an MoU with a key European automotive supplier for the long-term supply of parts for an array of automotive, non-automotive and stationary applications. The company is chalking out plans for capacity expansions and has recently doubled its manufacturing capacity in the UK and China. SMT shares have delivered stellar returns of over 70 per cent in the past one year and has a market capitalization of around £6,130 million.

TI Fluid Systems (LON: TIFS)

TI Fluid Systems provides thermal management and fuel tank systems for combustible engines, hybrid and electric power terrains. TIFS proprietary technology has a lot of application in EVs compared to conventional cars.

The company is focused on developing cleaner, greener mobility solutions and therefore is keen on developing hybrid electric vehicle ('HEV') and battery electric vehicle ('BEV'). During the fourth quarter of 2020, the company launched production of thermal fluid management products for Volkswagen's BEVs. In addition, the company designed a new generation pressure-resistant plastic fuel tank for Volkswagen China HEV models. TIFS shares have delivered stellar returns of over 71 per cent in the past one year and have a market capitalization of around £1,602 million.


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