The massive disruption is heading down the road to a $ 1.5 trillion global truck market as legacy manufacturers and new entrants face pole position in a race for dominance of trucks without emissions.
Electric vehicles have attracted the attention of investors over the past year, as stocks such as Tesla TSLA,
Nikola NKLA,
NIO NIO,
XPeng XPEV,
Li Auto LI,
and the WORLD 1211,
he roared higher. And that’s for a good reason: electric vehicles will have penetrated 100% of the global car market by 2040, according to UBS UBS,
For 2025, the Swiss bank expects two players: Tesla and Volkswagen VOW,
– that they would have already become the best sellers of electric vehicles in the world, which would deliver around 1.2 million cars each as soon as next year.
But vehicle emissions don’t just affect cars. There are bigger things that move.
Amid changing regulations and technological innovation, alternatives to both electric batteries and hydrogen fuel cells are emerging in internal combustion engines to disrupt the global truck market, estimated by UBS to be worth $ 1.5 trillion. of dollars.
Essential readings: Buy these three stocks of batteries to play at the electric vehicle party, but stay away from this company, says UBS
The Swiss bank expects zero-emission vehicles, or ZEVs, to end up moving trucks powered by internal combustion engines, at a rapidly accelerated pace of change compared to three years ago as new entrants join the fight. .
In a report released Wednesday with the contribution of 21 analysts, UBS said it expects most of the truck market to be split between battery-powered electric vehicles and fuel-powered, hydrogen-powered electric vehicles. Analysts said renewable natural gas could also play a smaller role in the market.
The main driving force is global emissions regulations, but the economy of ZEV batteries and fuel cells is also highly competitive. UBS predicts that heavy trucks powered by batteries or fuel cells will be more cost-effective than diesel by 2030, including the cost of infrastructure. However, input supply remains a challenge, with the global shortage of battery cells projected for 2025, according to UBS, and the green hydrogen industry is still young.
UBS predicts that 30% of heavy truck sales in North America, Europe and China will come from ZEV by 2030, with ZEV trucks accounting for 40% to 60% of average service sales in these regions.
Read this: Forget about Nio and XPeng. This company and Tesla will be the first two electric vehicle plays in 2025, UBS says.
If Tesla’s goals are taken at face value, its battery-resistant semi-electric truck will be a “superior alternative” to internal combustion engines by 2025, UBS said.
In fact, to the extent that Tesla can maintain an advantage in battery innovation, analysts at the Swiss bank believe the US company “may have a built-in advantage” over heavy truck manufacturers who rely on third parties to supply batteries .
Conventional truck and engine manufacturers are expected to fight hard to maintain control, even through new offerings and partnerships, but UBS expects them to “lose at least a share” of the market. Headline manufacturers are facing the “biggest headwind” of this space change, the bank said.
In mid-service trucks, new entrants like Rivian, Lion and Chanje establish a presence and will be the main challengers. These companies are currently privately owned, but could be made public through an initial public offering or a merger with an acquisition corporation for special purpose blank check.
Month: Tesla faces the race with Volkswagen, as the German car giant targets the cost of the battery and the new factories
As for trucks and heavy engines, we expect Tesla, Nikola and Hyliion HYLN,
to master if they are able to run in their respective visions, UBS said, though headlines like Toyota 7203,
and Hyundai 005380,
they are also expanding globally. Analysts noted that both the new entrants ’battery and fuel cell offerings are still under development and could fall short of targets for both weight and range.
According to the UBS model, all of the following conventional engine and truck manufacturers are expected to lose market share by 2030: Cummins CMI,
Daimler DAI,
Volvo VOLV.B,
– owner of Mack Trucks – and Traton 8TRA,
which is majority owned by Volkswagen and is expected to complete the acquisition of Navistar NAV,
in the middle of 2021.
In this battle between truck manufacturers, UBS expects infrastructure, battery and fuel companies to rise above the fight and enjoy the maximum wind. These action groups are your preferred options. The Swiss bank observes the electrical infrastructure company Quanta Services PWR,
and chemicals and battery packs like Albemarle ALB,
LG Chem 051910,
and Contemporary Amperex Technology Co. Limited (CATL) 300750,
The following graph details the most preferred and least preferred UBS stock selections in the report:
