It is no secret that in the last few years, as awareness of global climate change has been growing, the electric car industry has been thriving across financial markets, while petrol and diesel car stocks have been losing some of their appeal. This trend of green cars has been taking shape for quite some time. It seems to be gaining momentum as increasing numbers of car companies have declared that they will replace their traditional gasoline vehicles with environmentally-friendly electric cars. It is just the start of a growing market that could pave the way for a greener future.
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What made the electric car market grow?
In recent years, the world has become much more environmentally friendly and seems to acknowledge the damage that humanity has caused nature and itself. A growing number of people have decided to adopt a healthier lifestyle. We eat more nutritious foods, use recycled products, and as of late, drive less polluting cars, to try and battle climate change.
This green revolution has expanded to the point that some countries, such as Denmark, Ireland, and the Netherlands have announced that they will completely ban diesel and petrol motored vehicles¹. They are forcing the car industry to start manufacturing electric vehicles. And guess what? It’s working. Luxury brands such as Volvo and Rolls Royce are just a few of the car companies which have pledged to stop making petrol-powered cars within only a few years, making electric car stocks more desirable.
However, it is not just that electric cars are better for the environment, but fact that they have a lot to offer. Technology has become a lot more advanced in recent years, and these are factors that should be taken into account. Entrepreneurs such as Elon Musk redefined the way we experience the electric car, by producing a product (that, according to some consumers,) exceeds expectations, making electric cars more popular around the world, persuading and getting electric car companies to create a larger variety of more eco-friendly models.
Who’s leading the race?
Tesla
By far, the most familiar and recognisable name on this list. This electric car manufacturer was founded in 2003 and has managed to become the world’s most valuable automaker by market value, when its share price soared in 2020, giving the business a market valuation of over $200 billion, removing Toyota from its prestigious throne². However, with a growing number of car companies such as Volkswagen, Ford and Porsche aiming to launch their electric vehicles in the future, creating more competition for this unique automaker, it might be a matter of time before some other car manufacturer removes Tesla from its number one spot.
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NIO
Tesla’s Chinese carmaker challenger, Nio, is probably the only company which has managed to threaten Tesla’s status as the world’s number one electric car company. Its market cap is valued at nearly $70 billion, positioning it as one of the world’s top automakers. It still has a long way to go before becoming the next Tesla. However, if it proceeds to deliver on that front, investors will have a hard time ignoring this unexpected electric marvel.
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General Motors
Another car manufacturer that has big plans to take over the green revolution is General Motors. The Detroit-based giant went so far as to develop its very own electric vehicle battery technology, called Ultrium. It is also building a battery factory and plans to develop a wide range of new electric vehicles in the next few years³. It recently announced it will launch electric delivery vehicles for companies such as FedEx and UPS, and plans to go all-electric by 2025, so it is going to be very interesting to see how things shape up.
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The finish line
Within just a few years, it looks like the car market will be flooded with ground breaking technologies that could make our normal day-to-day drive to the office a lot more exciting, as many car companies from around the world do their best to find the perfect replacement for petrol and diesel fuel. But it is important to note that electric cars are just the first phase in this technological revolution. It won’t be long before driverless cars hit our roads, but in order for them to work smoothly, 5G and renewable energy will need to prove that they are efficient and effective. However, if everything goes according to plan, it looks like the car market could show incredible innovation — and amazing investment opportunities.
For more information about driverless cars, feel free to check out this eToro blog.
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Sources
- https://carpart.com.au/blog/car-part-world-news/14-countries-banning-fossil-fuel-vehicles-norway-leads-in-2025
- https://www.cnbc.com/2020/07/01/tesla-tops-toyota-to-become-largest-automaker-by-market-value.html
- https://www.detroitnews.com/story/business/autos/general-motors/2020/08/19/gm-electric-push-china-ev-spinoff-talk/3400605001/