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Electric Vehicle Industry 2024: Market Scope, Key Players, Upcoming IPOs, and Investment Opportunities

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Synopsis:

In this article, we will discuss the growth of the EV industry, its market scope and size, the key players in the market, the Upcoming IPO of an EV company, and investment opportunities in general.

Did you know when the first ever Electric Vehicle was created? 1970? No! 1940? No! Even before that? Yes! It was in the year 1832, that the first EV was built and brought to life. The concept has taken its sweet time to become mainstream. Although it was slow to get started, the growth of the industry has been quite impressive in recent years. About 26 million electric vehicles were on the road by the end of the year 2022. The number is rising energetically as we speak.

The EV industry is one of the fastest-moving industries in the world at present, revolutionizing the automotive sector by offering a clean, sustainable alternative to traditional ICE vehicles. With growing concerns towards climate change, air pollution, and dependency on fossil fuels, the shift towards EVs is becoming imperative.

Current Market Scope and Size

The global EV market is likely to grow phenomenally during the next decade. From an estimated volume of nearly $300 billion in 2023, the market is reaching out for a $1 trillion share by 2030. Projections suggest at least $750 billion by that year, in volume for the EV market. In 2023, about 14 percent of all global vehicle sales consisted of electric vehicles, and this number is estimated to reach 25 percent in a year or two.

This growth is supported by technological advancements, favorable government policies, and growing consumer demand for eco-friendly vehicles. Key markets, such as North America, Europe, and Asia-Pacific, are dominated by China and the United States in terms of production and adoption.

Key EV Players

Several companies are significant contributors to the electric vehicle (EV) industry. These companies are recognized for their substantial market presence and innovative efforts. Some of the notable ones globally include:

  1. Tesla Inc.: Tesla is still outclassing all others in the electric vehicle market with its high-performance electric cars, innovative battery technology, and huge network of Superchargers. This company is also cornering the markets in ADT and energy solutions.
  2. BYD: Located in China, BYD is another large company in the EV business, offering electric cars, buses, and trucks. Besides that, it is among the largest rechargeable battery manufacturers—thereby covering a very crucial part of any EV.
  3. General Motors, GM: General Motors has about 5 percent market share in the US, and is planning to go exclusively electric by the year 2035.
  4. Rivian: This US automobile manufacturer specializes in electric trucks and sport utility vehicles. Rivian touts robust adventure and outdoor lifestyle themes. It has also had deep investment from major players like Amazon and Ford.

As far as India is concerned, these are some key players in the EV industry:

  1. Tata Motors: Tata Motors has managed to stay at the top in the Indian EV market by carving its own niche with car models like Tata Nexon EV and Tata Tigor EV. It continues to expand its EV portfolio through investment in battery technology, charging infrastructure, and collaborations that will aid in scaling up its market presence.
  2. Mahindra & Mahindra: Among these, Mahindra & Mahindra boasts a sterling portfolio of electric vehicles, such as the Mahindra eVerito and an electric version of its popular KUV100. Additionally, the company is working on electric three-wheelers and advanced battery technology to support EV initiatives.
  3. Hyundai Motor India: In the Indian EV market, Hyundai Motor India managed to make its presence felt by introducing the Hyundai Kona Electric, one of the first fully electric SUVs in the country. The company is eyeing to increase its EV lineup, for which it has already been investing in the development of new models and charging infrastructure.
  4. Maruti Suzuki: Geared up to enter the EV market is Maruti Suzuki, one of the largest car manufacturers in India. The company has a plan to launch its maiden electric car in India soon, relying on its wide reach and customer network.
  5. Ola Electric: A new EV player, Ola Electric, is going to ring the bell with its upcoming IPO. The company has been recognized because of its electric scooters; besides, it is expanding into electric cars. The Ola IPO is going to be one of the most awaited in upcoming IPOs of 2024.

What the Union Budget 2024-25 Offers for the EV Industry

The Union Budget for 2024-25 has brought in several steps to further the growth of the EV sector in India. Critical highlights of it include:

  1. Incentives to Manufacturing of EVs: Enhanced subsidies and incentives were announced by the government for firms engaged in the manufacture of EVs and their components, such as batteries and electric motors. The idea is to encourage domestic production as much as possible, bringing down imports.
  2. Charging Infrastructure: Much funds have been allocated toward developing a charging infrastructure across the country. These include installations of charging stations along national highways for ease of use by early movers into EVs.
  3. Incentives to Buyers of EVs: The budget has outlined a few incentives in this regard, such as cuts in GST rates and income tax deduction on loans taken to buy EVs, that will encourage people to buy EVs. This can make EVs much more affordable and increase their adoption among the general public.
  4. Research and Development: The government is encouraging research in the field of EV technology. This includes innovations of batteries, energy storage inventions, and autonomous driving technology.

Why Investors Should Keep an Eye on the EV Industry

The EV industry is a potential goldmine for investors. Several factors are fueling the growth of EVs, including

  1. Growing Demand: With growing concerns about the environment, EV demand has suddenly come up globally, not to mention other incentives like government policies and advancements in technology. Consumers are now more and more coming to terms with the fact that EVs offer less cost of operation, reduce emissions, and enhance driving experiences.
  2. Technological Improvements: Since innovations in batteries, charging solutions, and vehicle designs never stop, EVs have been rapidly moving into the zone of higher efficiency, lower cost, and greater accessibility. This continuous improvement opens up new routes of investment in related sectors of battery production, renewable energy, and charging infrastructure.
  3. Government Support: Most governments across the world have framed policies and incentives to encourage the adoption of EVs, such as subsidies, tax benefits, and investments in infrastructure. All this support serves as a conducive environment for companies in an EV business.
  4. IPO Opportunities: With the upcoming opportunities in the EV sector, including the highly anticipated Ola Electric IPO, come some very niche investment opportunities. The investors can make the most of the growth potential of firms that enter the market, offer their services, and expand them.

Materials Used in the EV Industry

The EV industry requires several materials, especially for the production of batteries. Some of the critical materials are:

  1. Lithium: Li is an elemental material in lithium-ion batteries; these are used for energy storage in EVs. Therefore, with increasing EV production, lithium demand will increase significantly, proving to be the most critical material that will be required in the industry.
  2. Cobalt: This element is one of the elements in the composition of the battery, well known for their high energy density and stability. At the same time, new alternatives are being researched into production against the ethical and environmental concerns over its supply chain.
  3. Nickel: Used in the cathodes of batteries, nickel contributes to the attainment of high energy density and a long life expectancy. As the need for performance grows, so is the demand for nickel batteries.
  4. Graphite: A critical component in battery anodes, graphite matters into how long and how well a battery can run. Deploying natural and synthetic graphite, the continued work is in progress for improving performance and sustainability.
  5. Rare Earth Elements: These constitute the elements required for manufacturing electric motors and other components. The supply and sustainability of rare earth elements have emerged as critical issues for the EV industry.

Conclusion

The EV industry is a wide-open market for investors, particularly in the light of future IPOs that would bring in new entrants and technologies, such as Ola Electric IPO. When the industry looks at its future trajectory, a strong focus on sustainable materials and technology will make all the difference. Investors and stakeholders should be keenly watching the developments in this dynamic and fast-expanding sector.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What is the current size of the global electric vehicle market?

Answer Field

The global electric vehicle (EV) market is estimated to be around $300 billion as of 2023. It is expected to grow significantly, surpassing $750 billion, and even reach $1 trillion by 2030, driven by advancements in technology, supportive government policies, and increasing consumer demand.

Who are the major players in the EV industry?

Answer Field

Major players in the EV industry include Tesla Inc., BYD, GM Motors, Rivian, and Ola Electric. These companies are known for their innovations in electric vehicles, ranging from cars and SUVs to electric scooters and trucks.

What incentives are included in the Union Budget 2024-25 for the EV industry in India?

Answer Field

The Union Budget 2024-25 includes several incentives for the EV industry, such as increased subsidies for EV manufacturing, development of charging infrastructure, tax benefits for EV buyers, and support for research and development in EV technology.

Why should investors consider the EV industry for investment?

Answer Field

Investors should consider the EV industry due to the rising demand for environmentally friendly vehicles, continuous technological advancements, strong government support, and lucrative IPO opportunities, such as the upcoming Ola Electric IPO.

What materials are critical to the EV industry?

Answer Field

Key materials essential to the EV industry include lithium, cobalt, nickel, graphite, and rare earth elements. These materials are crucial for battery production and the overall functionality of electric vehicles.

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