E-mobility and its challenges
The current rising demand for electric vehicles simultaneously leads to an increasing demand for energy storage systems, particularly batteries, which in turn drives the demand for raw materials such as lithium, cobalt, and nickel – essential materials for battery production.
Additionally, the ongoing technologisation and automation of vehicles (including advanced driver assistance systems) represent another significant driver of this trend. A key challenge for the transition to electric mobility also lies in the widespread development of a reliable charging infrastructure.
Current developments
In recent months, companies in the e-mobility sector, particularly European and US automobile manufacturers, have experienced increasing pressure. In many cases, demand has fallen short of expectations. A major reason for this is that electric cars, despite government subsidies, are still too expensive for many consumers. German car manufacturers, in particular, are heavily focused on the premium segment, making it difficult to attract new customer groups beyond the so-called first adopters.
Furthermore, from a consumer perspective, the charging infrastructure in Europe and the USA is still inadequately developed. Combined with the – in the eyes of consumers – insufficient range of many electric vehicles, this often negatively influences purchasing decisions. A globally weakening economy in recent months has additionally contributed to the declining demand.
E-mobility at a glance
What is e-mobility?
E-mobility encompasses the use of electrically powered vehicles such as electric cars, e-bikes, electric motorcycles, e-buses, and e-trucks. These vehicles primarily draw their energy from the power grid and are quiet, efficient, and have low emissions. They are therefore considered ideal for delivery services, transportation, and car-sharing, especially in cities.
Hybrid vehicles combine electric and conventional propulsion technologies and are seen as a transitional solution until fully electric cars become the norm.
E-mobility as a key component of the mobility transition
E-mobility can be divided into three main categories:
Manufacturers of vehicles such as cars, motorcycles, or e-bikes;
Suppliers – including companies that provide batteries, vehicle components, and charging infrastructure;
Mining companies – play a crucial role in the supply chain by extracting the necessary materials, such as rare earth elements;
Why Invest in e-mobility?
The transport sector is responsible for a significant portion of global CO2 emissions, contributing to global warming. Electric vehicles emit no CO2 during operation and can be nearly CO2-neutral if powered by renewable energy. Additionally, they improve air quality in cities, thereby contributing to the health of residents.
Given the limited supply of fossil fuels and growing urban populations, the shift to e-mobility is considered a sustainable and forward-looking solution. Many countries therefore promote the purchase of electric vehicles through financial incentives.
Strategic positioning and market segments
Raiffeisen KAG views the topic of "e-mobility" as a subcategory of the,
China as the winner in e-mobility?
Despite optimistic growth forecasts for the e-mobility sector in the coming years, it seems that the expectations of recent years are not being fully met. The still high acquisition costs of electric cars for the average consumer, as well as the inadequately developed charging infrastructure, could continue to lead to sales problems, particularly in Europe and the USA. Additionally, the US elections and the rise of right-wing, often climate-sceptic parties in various European countries bring uncertainties regarding future support for e-mobility. This development could further extend the time until electric vehicles become affordable for the average consumer.
In this context, China is emerging as the winner in the global e-mobility development, while European and American manufacturers struggle to offer affordable models for the masses. However, it seems realistic that European car manufacturers, particularly in the premium segment, can at least partially maintain their strong market position in internal combustion engines within the electric vehicle sector. Nevertheless, it currently appears that China could continue to expand its global market leadership in this industry.
Fundamentally, with economic recovery and increasing consumer power, the demand for electric vehicles, which was particularly suppressed last year, could recover in a short period. Therefore, we are maintaining our investments in this subtrend, even though the price development in recent months has not been particularly encouraging, with few exceptions.
Fund in focus: Raiffeisen-MegaTrends-ESG-Aktien
Subtrend e-mobility
The subtrend of e-mobility in the fund Raiffeisen-MegaTrends-ESG-Aktien aims to benefit from the shift towards more environmentally friendly mobility by specifically investing in companies that are significantly involved in the development of e-mobility.
BYD as the largest position in e-mobility within the fund Raiffeisen-MegaTrends-ESG-Aktien
The largest position in this subtrend within the Raiffeisen-MegaTrends-ESG-Aktien is currently the Chinese electric car manufacturer BYD. The company is one of the global market leaders in electric vehicles and is also involved in battery production, as well as the construction of rail vehicles and electronic components. In China, BYD is already the leading provider of electric cars and the second-largest producer of batteries. Globally, the company is gaining increasing significance and is directly competing with Tesla, the leading electric car manufacturer to date. Recently, BYD sold more electric cars than Tesla for the first time.
On the supplier side, we are currently invested in Valeo, a French manufacturer of automotive components. Valeo develops and produces a wide range of vehicle parts, including lighting systems, wipers, and engine cooling systems. The company also offers motors, drive systems, as well as safety, electrical, and connectivity technologies.
Among mining companies, we hold a position in First Quantum, a Canadian company specialising in copper mining, which also mines nickel, cobalt, and gold. The demand for these raw materials is heavily dependent on the development of the e-mobility sector, especially since nickel and cobalt are crucial for battery production.
Additionally, we hold equities in Fastned, a Dutch company operating a growing network of fast-charging stations in Europe, Samsung SDI, a South Korean company engaged in the development and production of screens, batteries, and accumulators, as well as LG Chem and Tianneng Power, a Chinese company primarily manufacturing motive batteries for e-bikes.
Conclusion
E-mobility remains a promising yet challenging subtrend within the fund
Investors should carefully weigh the opportunities and risks but should not overlook the long-term potentials of e-mobility.
The fund exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.