Investors ignoring other EV frontrunners

31 March 2021
| By Laura Dew |
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Tesla’s dominance in the electric vehicles market has “vanished” as established automakers jump on the EV trend, according to Antipodes.

Andy Gibson, senior investment analyst at Antipodes, said while Tesla held the dominant market share for several years since launching its first car in 2008, established rivals were now jumping into the space.

However, investors were fixated on the growth of Tesla, which had risen by over 1,000% in five years, at the expense of other manufacturers.

In a webcast, he said: “Over the next few years, the industry dynamics will look very different. Volkswagen is at the forefront, this competition is coming from companies who have a long history of producing great cars. VW have more than 70 EV launches planned over the next decade.

“They may have been slower to come to market but these companies weren’t asleep at the wheel.

“Tesla no longer has that first mover advantage, it has arguably vanished.”

Other companies entering the market included General Motors, Volvo and Toyota.

He said the VW group, which included brands Skoda, Porsche and Audi, made the decision to move into the EV space after the diesel emission scandal in 2015 which saw the company fined for cheating emission tests in the US on diesel cars.

“This dented VW’s brand image and was a seismic event so VW aggressively committed to EVs to clean up its reputation, more so than any other auto company. They are already one of the world’s largest carmakers and could have 20% of the EV market in the future,” he said.

VW sold 230,000 last year and Antipodes said it expected would climb to 600,000 this year while Tesla was expected to sell around 800,000.

Shares in Tesla had risen 1,200% over the past five years compared to 114% by VW.

“The Tesla valuation is about $630 billion whereas VW is $150 billion, they will sell more in the next few years and it’s hard to see how that doesn’t represent a great opportunity at current valuation levels.

“The EV race is one in which the spectators are fixated on the current frontrunner while ignoring the giant emerging from the pack.”

Tesla was held by funds such as Hyperion Global Growth Companies, Vanguard Index International Shares and BetaShares Nasdaq 100 ETF.

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