Though it’s only a month old, 2020 has already been heralded as the “Year of the Electric Vehicle,” and it’s easy to see why. With dozens of new EV car and truck models set to come to market this year, growing consumer preference for affordable green vehicles, and new government regulations coming online that discourage sale of traditional internal combustion vehicles in favour of EV options, the future of electric vehicles (and investment opportunities in the sector) looks bright.
Record Number of EVs Coming to Market in 2020
The number of EV options is growing worldwide and looks to set records in 2020.
In North America, there will be at least 104 EV options on the market by Q4 2020, up from 79 in Q4 2019. New models available in the US will include the Tesla Model Y, the Ford Mustang Mach-E, the Rivian R1T, and the VW I.D. Crozz. The EU will likewise see a spike in EV options, with 165 models available by year-end, up from 119 in Q4 2019.
Crucially, 2020 will be the year that major manufacturers begin to catch up to early movers like Tesla. Expect to see production EVs in every price bracket and every category, from passenger vehicles, sports cars, and luxury models, to pickup trucks (and not just Tesla’s Cybertruck!) and even an electric reinvention of the formerly gas-guzzling Hummer. Manufacturers including Aston Martin, Audi, BMW, Lotus, Mini, Porsche, and Volvo (amongst others) will all have EV entries in 2020.
McKinsey projects over 400 new EV models in the global pipeline over the next three years, compared to 136 in 2018.
Projected Sales of EV Vehicles in 2020 and Beyond
European experts believe that as many as 131,000 electric cars could be on UK roads by the end of 2020, thanks to the variety and affordability of new EV models coming to market this year. And with new EU regulations that went into effect January 1 which penalize carmakers for vehicles sold that emit more than 95g of carbon dioxide per kilometre, experts believe 540,000 electric cars will be sold across the EU in 2020 (up from 319,000 in 2019), as carmakers promote EV more aggressively.
A recent Deloitte study suggests that global EV adoption will rise from four million vehicles in 2020, to 12 million by 2025, and 21 million in 2030. It was projected that by 2030, 70% of EV sales will be Battery Electric Vehicles (BEVs), thanks to growing consumer demand for greener vehicles and government regulations aimed at reducing the number of emission-producing vehicles on the road.
Cost of Ownership and EV Charging Stations Catching Up
That same study from Deloitte projects a global market tipping point in 2022, when the cost of owning an electric car will be at par with a traditional internal combustion engine model. Others, however, including the International Council on Clean Transportation, suggest that this point has already been reached in the UK and several European countries.
In other jurisdictions, such as Canada, the cost of ownership differences with EVs are offset in part by government rebates and incentives to go electric. In a report this month, the federal rebate program for the purchase of electric vehicles announced in May 2019 has proven so popular that it has blown through half its allotted $300 million CAD budget in just eight months. 33,000 Canadians have already received a rebate, and at this rate, the fund will be empty by the end of this year if not topped up.
Canadians will also benefit in 2020 from expanded availability of EV charging stations across the country. The Trudeau government revealed plans late last year to install an additional 5,000 electric vehicle charging stations across Canada. Ontario Power Generation and transmission utility Hydro One have pledged to jointly deploy over 100 electric vehicle fast chargers in 43 locations around Ontario by the end of 2020. These EV chargers come in addition to the 40-station-long Petro-Canada Trans-Canada EV fast-charging network—the “Electric Highway”—completed late in 2019.
Invest in EV Stocks with CARS ETF – Evolve Automobile Innovation Index Fund
The stock market has taken notice of the Year of the Electric Vehicle, too. You only need to look at the performance of electric car stocks like Tesla and Nio in the early days of 2020 to see just how bullish the market is on the future of EV technology.
A great way to invest in a diverse portfolio of companies involved in developing electric drivetrains, autonomous driving, and network-connected services for automobiles is through Evolve’s CARS ETF, the Evolve Automobile Innovation Index Fund. Investing primarily in equity securities of companies working on the future of electric vehicles, this fund had total returns of 51.96% in 2019* and was the second-best performing equity ETF in Canada last year.** CARS ETF could be the right vehicle for you and your portfolio to take full advantage of the opportunity available in 2020 for the Year of the Electric Vehicle.
*Source: Bloomberg Finance L.P., as at December 31, 2019.
**Based on the Bloomberg Finance L.P. classification of 475 Canadian unlevered equity ETFs with a full year of performance in 2019 as at December 31, 2019.
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