Electric Car News Roundup – 38

electric car news

Tesla Is Now The Most Valuable US Automaker Ever


Wall Street’s current love for Tesla (TSLA) has lifted its shares to a level never before achieved by a US automaker.  Tesla shares, which are up more than 160% since hitting a 52-week low last June now have market value of $86.5 billion.  That gives the electric car-maker the distinction of being the most valuable US automaker in history.  


Tesla Model 3
Tesla Model 3

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This is certainly an incredible achievement for a company that was founded a 100 years after the Ford Motor Company and less than two decades ago.  What is most striking is not only the gigantic valuation, but that Tesla has proved that new entrants can achieve leadership in what has been historically a difficult sector to disrupt.  In fact, the global traditional automotive sector is well on the course for significant disruption, to include: a reinventing of the value chain, in particular the route to market to customer, the paradigm shift in technology i.e. electric vehicles and autonomous driving, last but not the least, consumers change in engagement with the concept of mobility i.e. personal ownership to sharing schemes.  

Tesla is not the only recent entrant in the global automotive sector.  The industry is filled with small to medium-sized companies determined to challenge incumbent players.  It is not fanciful to state that within the next 10 years the automotive sector will be unrecognizable.  The only question is who will survive?  Our view is that some of the strongest companies over the past 100 years may not survive to to see another few decades.   We know wait with bated breath for Tesla to break the US$ 100 billion valuation threshold.


Polluting Vehicles Could Be Pulled From UK Sale, Say Carmakers 


New fines for breaches on CO2 limits will clash with clash with Britons’ taste for higher-emission SUVs. Carmakers could pull models from the UK, the automotive industry has warned, as Britain’s taste for polluting vehicles clashes with difficulty of meeting post-Brexit carbon dioxide limits. 


electric vehicles
Credit: The Guardian

e-zoomed view


It is indeed good to note that auto manufacturers may well be forced to curtail the sale of inefficient and higher polluting SUVs in the UK.  However, it is a pity that only at ‘crisis point’ are automotive companies contemplating the reduction of the sale of polluting internal combustion engine (ICE) SUVs in the UK.  They have had many opportunities to improve the average and overall CO2 emission of their respective portfolios but have done very little.  

But it is not only about curtailing the sale of higher polluting vehicles that is important, but equally imperative is the introduction of lower emission cars and vehicles in their respective model portfolios.  In particular, the introduction of battery-electric vehicles (BEVs)  or plug-in hybrid electric vehicles (PHEVs).  

Though the current predicament is best described as ‘too little too late’, we encourage auto manufacturers to urgently rectify their sales strategy, such that, they introduce and market as many ultra-low-emission vehicles (ULEVs) as possible.  


Scrap VAT To Rev Up Sales Of Electric Cars 


The government should scrap VAT on electric cars, ministers have been told.  Radical change was needed because too many drivers were still put off green cars by high buying prices, it was said.  The AA said that ministers had to go further than the present £3,500 grant offered to motorists to help them to buy the cars. 


Electric Cars Charging
Electric Cars Charging (credit: The Times)

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We couldn’t agree more.  It is not only important to offer generous incentives but also to offer visibility for the long term.  As of today, there is little known about the plug-in car grant (PiCG) incentive from the UK government post March 2020.  However, in successful EV markets like Norway, the incentives are clear till end 2021.  The UK government can learn much from the example of Norway. 


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Author

Ashvin Suri

Ashvin has been involved with the renewables, energy efficiency and infrastructure sectors since 2006. He is passionate about the transition to a low-carbon economy and electric transportation. Ashvin commenced his career in 1994, working with US investment banks in New York. Post his MBA from the London Business School (1996-1998), he continued to work in investment banking at Flemings (London) and JPMorgan (London). His roles included corporate finance advisory, M&A and capital raising. He has been involved across diverse industry sectors, to include engineering, aerospace, oil & gas, airports and automotive across Asia and Europe. In 2010, he co-founded a solar development platform, for large scale ground and roof solar projects to include the UK, Italy, Germany and France. He has also advised on various renewable energy (wind and solar) utility scale projects working with global institutional investors and independent power producers (IPP’s) in the renewable energy sector. He has also advised in key international markets like India, to include advising the TVS Group, a multi-billion dollar industrial and automotive group in India. Ashvin has also advised Indian Energy, an IPP backed by Guggenheim (a US$ 165 billion fund). He has also advised AMIH, a US$ 2 billion, Singapore based group. Ashvin has also worked in the real estate and infrastructure sector, to including working with the Matrix Group (a US$ 4 billion property group in the UK) to launch one of the first few institutional real estate funds for the Indian real estate market. The fund was successfully launched with significant institutional support from the UK/ European markets. He has also advised on water infrastructure, to include advising a Swedish clean technology company in the water sector. He is also a member of the Forbury Investment Network advisory committee. He has also been involved with a number of early stage ventures.

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