Automobile Innovation: Dealing with Demand for Electric Vehicles

Electric vehicles remain in high demand, which is evident by the recent delivery and production figures carmakers have been reporting.

Tesla Inc., the world’s leading manufacturer of electric vehicles (EVs), said that it delivered 343,000 EVs in the third quarter of 2022. Total EV production amounted to 365,000 units. The company also said that it produced 19,935 Model S and Model X vehicles and 345,988 of its Model 3 and Model Y vehicles.¹

Furthermore, Tesla is planning to double its EV sales in Germany and sell 80,000 units for 2022. In 2021, the company sold just 39,714 in Germany. It’s worth noting that Tesla recently built its first European Gigafactory in Gruenheide, a city near Berlin, which opened in March 2022.²

Cybersecurity: Showing Recession Resilience

A recession could be looming. As economic uncertainty prevails, businesses generally cut back on spending. However, the demand for cybersecurity products and services remains strong despite economic concerns beginning to negatively impact other parts of the tech sector. This has led to the belief that the cybersecurity industry may be recession resilient.

For example, in late August, Cisco Systems Inc., a networking and communications giant, revealed that its security business accelerated faster than any other segment and increased $100 million above what analysts were expecting. The company’s CEO, Chuck Robbins, announced that it will be staffing up its security segment and raising its prices to keep up with rising costs.³

Cloud Computing: Expanding to Greece

Alphabet Inc’s Google announced that it will set up its first cloud region—which is a cluster of data centers—in Greece. This will contribute $2.13 billion to Greece’s economy and create 20,000 jobs by 2030. Greece’s cloud region will provide storage and cloud computing services for Google customers. It will let organizations better use their data, enhance security, and improve low latency.

Google announced its cloud region in Greece just two years after Microsoft announced its plans to set up data centers in the country. Meanwhile, Amazon’s cloud computing business unit opened its first office in Greece last year.⁴

E-Gaming: Releasing New Video Games

Recently at the Tokyo Game Show, Sony Group Corp. and Nintendo Co Ltd. (held by the fund) said that 2023 will be one of the biggest years for game releases. As games have been delayed, it has impacted sales at gaming companies. But gamers can expect several new releases from some of the biggest video game publishers.

Nintendo is planning to release Zelda: Tears of the Kingdom, Fire Emblem: Engage, and Pikmin 4. Sony’s video game lineup for 2023 includes Hogwarts Legacy, Marvel’s Spider-Man 2, Final Fantasy XVI, Stellar Blade, and Synduality. Sony’s new virtual reality system, dubbed PSVR2, is also expected to be released in early 2023 and reports indicate that there are more than 20 games for that system.

Other new video game releases include Diablo IV from Activision Blizzard Inc., Street Fighter VI from Capcom Co. Ltd., and Forspoken from Square Enix Holdings Co Ltd.⁵

5G: Connecting with Robotics

T-Mobile Inc. recently announced that it is working with InDro Robotics, a Canadian air and ground robotics research and development firm, using T-Mobil’s 5G to remotely connect InDro Robotics’ ground-based industrial inspection robots, testing security, and inspection capabilities at electrical substations.

InDro Robotics’ Sentinel was selected by the Electric Power Research Institute (EPRI) for its ability to provide 24-hour substation asset inspection and security monitoring. The ground-roving robot performed well. While using the 5G routed connected to T-Mobile’s networking, it was able to do surveillance and relay data back to the maintenance team that operated the robot remotely in real time.⁶

Robotics Automation: Unveiling Tesla’s Optimus

On Friday, September 30, Tesla Inc. unveiled Optimus, a prototype humanoid robot, as the automaker bets on artificial intelligence, automation, and how it could impact physical work.

At the unveiling, the robot running on Tesla’s full self-driving computer, walked on the stage and displayed a wide range of motion such as waving and pumping its arms in the air. Although the robot had visible wiring and moved slowly, CEO of Tesla, Elon Musk, said that he would like the robot to be manufactured at scale, the price to be less than $20,000, and the robot to have core physical capabilities such as moving fingers independently and opposable thumbs to operate tools.⁷

Fintech: Simplifying Accounting with Quickbooks

Intuit Inc, a provider of financial management and compliance products and services for accounting professionals and small business, and held by the fund, launched QuickBooks Online Advanced in the U.K. This is an innovative cloud-based offering for accounting professionals and small businesses.

This solution was designed for when operations and bookkeeping becomes more complex at organizations. It includes features like customized reports, data controls, and data restoration.

Nick Williams, U.K. Product Director at Intuit QuickBooks, said that small businesses had a very tough time during the pandemic, and with the cost of living increasing, it only adds pressure on them. With QuickBooks Online Advanced accountants can improve their processes and streamline their finances.⁸

Genomics: Fast Tracking Tirzepatide

Eli Lilly & Co. announced it was granted Fast Track designation for Tirzepatide, a drug designed to treat adults with obesity or overweight with weight-related comorbidities. The FDA grants Fast Track designation in order to expediate the review of drugs to treat serious conditions and fill an unmet medical need. The goal is to get new drugs to patients as quickly as possible.

The company expects to initiate a rolling submission of a new drug application (NDA) for Tirzepatide this year. The rolling submission, which is expected to complete by the end of April 2023, allows Eli Lilly to submit completed sections of an application for review by the FDA, rather than wait until all sections are completed. ⁹

 

EDGE ETF: Diversified Investing in Innovation

Disruptive innovation gives your portfolio an edge by ensuring you keep up with trends and developments in a quickly changing world, giving you exposure to high-growth industries.

The award-winning Evolve Innovation Index Fund provides access to global companies involved in disruptive innovation across a broad range of industries, including cybersecurity, cloud computing, eGaming and eSports, automobile innovation, 5G, FinTech, genomics, and robotics and automation.

Portfolio Strategy and Activity

For the month, Bristol-Myers Squibb Co. made the largest contribution to the Fund, followed by KDDI Corp, and Argenx SE. On last rebalance, these securities were added to the portfolio: FANUC Corp, Argenx SE, Waters Corp, and Block Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and Canada.

Stay updated with latest information on investing in innovation and industry updates on related investment products, sign up for our weekly newsletter.

 

Sources:

1. Kolodny, L., “Tesla delivered 343,000 vehicles in the third quarter of 2022,” CNBC, October 2, 2022; https://www.cnbc.com/2022/10/02/tesla-tsla-q3-2022-vehicle-delivery-and-production-numbers.html.
2. “Tesla aims to double vehicle sales in Germany in 2022, Automobilwoche reports,” Reuters, September 18, 2022; https://www.reuters.com/business/autos-transportation/tesla-aims-double-vehicle-sales-germany-2022-automobilwoche-2022-09-18/.
3. Novet, J., “Why cybersecurity stocks are beating the market,” CNBC, September 1, 2022; https://www.cnbc.com/2022/09/01/cybersecurity-stocks-are-beating-the-market-in-a-volatile-economy.html.
4. Google to build its first cloud region in Greece,” Financial Post, September 29, 2022; https://financialpost.com/pmn/business-pmn/google-to-build-its-first-cloud-region-in-greece.
5. D’Anastasio, C., “A Video Game Pile-Up Next Year Doesn’t Guarantee a Sales Boom,” Bloomberg, September 16, 2022; https://www.bloomberg.com/news/newsletters/2022-09-16/game-releases-from-zelda-to-hogwarts-next-year-may-not-lead-to-higher-sales.
6. “T-Mobile 5G Powers Inspection Robot from InDro Robotics,” Business Wire, September 26, 2022; https://www.businesswire.com/news/home/20220925005071/en/.
7. Siddiqui, F., “Elon Musk debuts Tesla robot, Optimus, calling it a ‘fundamental transformation’,” Washington Post, October 1, 2022; https://www.washingtonpost.com/technology/2022/09/30/elon-musk-tesla-bot/.
8. “Launch of ‘QuickBooks Online Advanced’ aims to empower accountants and accelerate small business growth,” Yahoo! Finance, September 28, 2022; https://finance.yahoo.com/news/launch-quickbooks-online-advanced-aims-080000880.html

 

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