Massive disruption washes down the highway to a global $ 1.5 billion truck market as experienced manufacturers and new entrants struggle to manage their position in a race for dominance in trucks without release.
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 BYD 1211,
roar louder. And this is for good reason: according to UBS, UBS will have penetrated 100% of the global car market by 2040.
By 2025, the Swiss bank expects two players – Tesla and Volkswagen VOW,
– to have already emerged as the best EV sellers in the world and delivered approximately 1.2 million cars each next year.
But vehicle emissions are more than just cars. There are bigger things moving.
Amid changing regulations and technological innovation, both battery-electric and hydrogen-fuel cell alternatives to internal combustion engines are emerging to disrupt the global truck market, which is worth $ 1.5 billion, according to UBS.
Essential reading: Buy these three battery supplies to keep the party going for electric vehicles, but stay away from this company, says UBS
The Swiss bank expects non-exempt vehicles, or ZEVs, to eventually displace trucks powered by internal combustion engines, while the pace of change will accelerate rapidly compared to three years ago as new entrants enter the fray.
In a report published on Wednesday with the contribution of 21 analysts, UBS said it expects the bulk of the truck market to be shared among battery-powered electric vehicles and hydrogen-powered fuel cell electric vehicles. Renewable natural gas could also play a smaller role in the market, analysts said.
The main drivers are global emissions regulations, but the economy of both battery and fuel cell ZEVs is also very competitive. UBS plans that by 2030, heavy trucks powered by batteries or fuel cells will be more cost-effective than diesel, including the cost of infrastructure. However, the supply of inputs remains a challenge, with a global shortage of battery cells expected by UBS by 2025, and the green hydrogen industry still young.
UBS predicts that 30% of heavy truck sales in North America, Europe and China will come from ZEVs by 2030, with ZEV trucks accounting for 40% to 60% of medium sales in these regions.
Read this: Forget about Nio and XPeng. This company and Tesla will be the two best plays for electric vehicles by 2025, says UBS.
If Tesla’s targets are considered at face value, the heavy, battery-powered Semi-truck will be a ‘superior alternative’ to internal combustion engines by 2025, UBS said.
To the extent that Tesla can keep an edge in battery innovation, analysts at the Swiss bank believe the US company could have a “built-in advantage” over the old heavy-duty truck manufacturers who rely on third-party batteries. to deliver. .
Conventional truck and engine manufacturers are expected to fight hard to maintain control, including through new offerings and partnerships, but UBS expects to lose at least a share of the market. The established manufacturers have the “biggest headwind” in this changing space, the bank said.
In medium-service trucks, new entrants such as Rivian, Lion and Chanje are establishing their presence and will be the biggest challengers. These companies are currently privately owned, but may be acquired through an initial public offering or merger with a special purpose corporation.
Plus: Tesla gets a race with Volkswagen because German car giant targets battery costs and new gigabytes
As for heavy truck engines, Tesla, Nikola and Hyliion expect HYLN,
to dominate if they are able to execute their respective visions, UBS said, although incumbents like Toyota 7203,
and Hyundai 005380,
also expanding worldwide. The analysts noted that the supply of batteries as well as fuel cells of new entrants is still in development and that it may not have the targets for weight and range.
According to the UBS model, all of the following conventional truck and engine manufacturers will lose market share by 2030: Cummins CMI,
Daimler DAI,
Volvo VOLV.B,
– which owns Mack Trucks – and Traton 8TRA,
which is majority owned by Volkswagen and is expected to complete its acquisition of Navistar NAV,
mid 2021.
In this battle among truck manufacturers, UBS expects infrastructure, battery and fuel companies to rise above the battle and enjoy the most wind. These groups of stocks make up their favorite choice. The Swiss bank is monitoring the power infrastructure company Quanta Services PWR,
and chemicals and battery groups such as Albemarle ALB,
LG Chem 051910,
and Contemporary Amperex Technology Co. Limited (CATL) 300750,
More of UBS’s most and least preferred share choices from the report are set out in the table below:
