Selling the Most Electric Vehicles Is Not the Only Way to Measure Company Success
 |
A recent report by Market Research Future suggests the electric vehicle (EV) market will be worth $957 billion in 2030. Conversely, technology analyst, Dan Ives of Wedbush Securities, thinks the EV segment will be a $5 billion market by 2030. The difference in projections may be in how each defines the EV market. If either projection is simply the business of selling electric vehicles to consumers and businesses, it’s an incomplete view of the future of automotive. The future automotive space will be much larger than just EV sales. The market will consist of:
Electric vehicles
Autonomous vehicles
Mobility solutions
When including each of these three aspects of the automotive future, some believe the space will represent massive $10 trillion market opportunity. For many companies, it’s this level of market size that is driving their capital allocation. And for the individual investor, there are significant long-term investment gains to be made from the stocks of the corporate winners in the space.
I established the taGMan portfolio after identifying the companies destined to be leaders in a disrupted automotive space.
t - Tesla
a - Apple
G - Google (Alphabet)
M - Microsoft
a - Amazon
n - Nvidia
GM - General Motors
These are the companies I believe will capture significant revenue share in the category. These companies will prosper in an automotive world consisting of electric vehicles, self-driving vehicle technology, and business models around autonomous mobility solutions - TaaS businesses (transportation-as-a-service).
For those believing the winners will be the firms selling the most EVs only, the taGMan companies like Apple, Google, Microsoft, and Amazon make little sense to them. While these companies might not ever sell the most EVs (if any), the revenue generated from their technology critical for TaaS business customers or from their own TaaS businesses will be significant.
For example, it seems clear that Apple is all-in on its self driving vehicle ambitions. The smart phone market is only a $500 billion category with Apple capturing 40% of revenue in that category today. At $10 trillion, the TaaS market is too large even for Apple to ignore. Tim Cook, Apple’s CEO, has called autonomous technology “core technology” for the company.
Microsoft is already partnering with automakers that are developing autonomous driving capabilities. The company is providing cloud computing technology necessary for the big data requirements for self-driving execution.
Amazon acquired self-driving technology firm, Zoox, in 2020. The Zoox CEO, Aicha Evans, has admitted that “moving people is the foundation” of his company’s plans. However, once Zoox accomplishes this goal, “moving packages will be easily executed as well.” Additionally, Amazon acquired a 20% stake in electric vehicle automaker, Rivian. With exclusive rights to Rivian’s electric delivery vans, the company is now taking delivery of 100,000 EVs by 2030.
Nvidia builds self-driving computers for many automotive customers like Toyota and Mercedes today, as well as Chinese EV companies like Li Auto and Xpeng. Nvidia’s, CEO (Jensen Huang) believes autonomous vehicle development is the most intense machine learning and robotics challenge. Huang’s company already develops and produces autonomous vehicle chips, computer sensors, driving software and more.
How has the taGMan portfolio performed since its inception beginning in 2015?
What I’m Reading, Watching, and Hearing
GM to provide EV components across industries
Tesla Stock is Having One of its Best Years Ever. It Wasn’t Easy.
Disclaimer
TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.