The Hard Truth about Pivoting (Part 2): Electric Vehicles

The Hard Truth about Pivoting (Part 2): Electric Vehicles

Much like Disney in the media industry, traditional motor vehicle companies are also encountering comparable challenges to pivot their businesses from ICE (internal combustion engine) to EVs (electric vehicles). As technologies advance, they open doors for the creation of new products through more cost-effective methods. Established businesses must adapt their strategies or risk losing market share or even facing extinction.

Toyota, VW, and Mercedes have traditionally focused on producing ICE vehicles. However, they now find themselves at a juncture where EVs are gaining traction. This shift is driven by improvements in battery range, reduced charge times, and more affordable production costs. Nevertheless, EVs are still in the early stages of capturing market share. In 2021, only 8.6% of new cars sold worldwide were EVs. The transition from ICE to EVs in the new car sales market is on an upward trajectory. These established car manufacturers must continue to service and innovate in the ICE segment while also striving to carve out a share in the growing EV market. Striking this balance can be a challenging task, especially when resources and attention are stretched in both directions.

American Tesla and Chinese BYD are exclusively dedicated to the Electric Vehicle (EV) market. Their primary goal is to secure the largest possible share of the EV market and enhance its appeal to consumers. They achieve this by refining their expertise in producing more affordable vehicles and establishing charging station infrastructure in pivotal markets to make the charging process more convenient for their customers.

The impact of emerging technologies extends beyond the realm of Electric Vehicle (EV) and Internal Combustion Engine (ICE) companies. It ripples through various industries that depend on the demand for these vehicles. EVs presently demand less maintenance, and when needed, it’s typically handled by electricians rather than traditional mechanics. They also rely more heavily on semiconductors due to their electric components, lithium for their batteries, and software for safety and autonomous driving. The shift from ICE to EV will create opportunities for businesses to thrive and capitalize on this trend.

Key Indicators
Index / Fund / Rate
Start of Year
Last Week
This Week
% Change YTD
Index / Fund / Rate
Lunar BCI WW Flexible Fund
Start of Year
141.43
Last Week
173.87
This Week
173.43
% Change YTD
22.63% Lunar Capital increasesymbol
Index / Fund / Rate
JSE ALSI
Start of Year
73 049
Last Week
73 399
This Week
72 383 Lunar Capital stocktake arrow down
% Change YTD
-0.91% Lunar Capital stocktake arrow down
Index / Fund / Rate
NASDAQ Composite
Start of Year
10 467
Last Week
13 212
This Week
13 219 Lunar Capital increasesymbol
% Change YTD
26.29% Lunar Capital increasesymbol
Index / Fund / Rate
S&P 500
Start of Year
3 840
Last Week
4 321
This Week
4 288 Lunar Capital stocktake arrow down
% Change YTD
11.67% Lunar Capital increasesymbol
Index / Fund / Rate
Prime Lending Rate
Start of Year
10.50%
Last Week
11.75%
This Week
11.75%
% Change YTD
11.90% Lunar Capital increasesymbol
Index / Fund / Rate
USD/ZAR
Start of Year
16.98
Last Week
18.75
This Week
18.92 Lunar Capital increasesymbol
% Change YTD
11.43% Lunar Capital increasesymbol
Index / Fund / Rate
EUR/ZAR
Start of Year
18.44
Last Week
20.01
This Week
20.00 Lunar Capital stocktake arrow down
% Change YTD
8.46% Lunar Capital increasesymbol
Index / Fund / Rate
Brent Crude ($'barrel)
Start of Year
85.95
Last Week
93.60
This Week
92.26 Lunar Capital stocktake arrow down
% Change YTD
7.34% Lunar Capital increasesymbol
Source: Iress

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