Martin Armstrong forecasts electric vehicle (EVs) adoption as gas prices soar, which will make the switch from internal combustion engines (ICEs) to EVs more economically appealing for the average household.
The EV market is expected to grow from $287.36 billion in 2021 to $1318.22 billion in 2028 at a CAGR of 24.3% in the forecast period, according to Fortune Business Insights.
So the forecasting guru with his pi cycle model Martin Armstrong forecasts electric vehicle (EVs) adoption. The market dynamics for autos are interesting, bearing in mind Evs continue to post exponential growth in sales while the auto market as a whole is in a secular decline. Indeed, the auto industry is not very happy with millennials and GenZ, the coming generation, which is less car-crazy than the previous baby boomer generation.
“The EV market is expected to grow from $287.36 billion in 2021 to $1318.22 billion in 2028”
WEALTH TRAINING COMPANY
The coming generation is just not putting car ownership on the list of things to do
Perhaps it is because many are working in the gig economy with precarious working conditions, so going into debt to buy a high maintenance depreciating asset does not make sense.
But we also believe another trend could be in play where the pay as you go model is more appealing to the coming generation.
Is this the correct interpretation of The World Economic Forums’ mantra,” You will own nothing, and be happy?”
We have a futuristic vision of people booking autonomous electric vehicles AEVs on their mobile apps when they require private transport. Think of the finite resource and pollution that goes into building a car and then the recycling of renewable materials.
All that wastage and pollution for a product that is used for just 5% of its lifespan.
With AEVs you could flip that statistic on its head, so instead of being used 5%, you could have 95% usage during the car’s lifespan.
“We have a futuristic vision of people booking autonomous electric vehicles AEVs on their mobile apps when they require private transport”
WEALTH TRAINING COMPANY
Why own an asset with high maintenance and depreciation costs when you could get access to a vehicle at a fraction of the cost?
So the consumers’ need for private transport is satisfied in an economically sustainable way. Most people purchase cars for utility and they do not see it as an investment. The niche collectors car market is an exception to this. But it is a tiny market where buyers see classic cars as investments.
“as gas prices soar, the plan to switch to electric vehicles (EVs) seems more appealing to the average consumer which is the secret behind the curtain to make gasoline too expensive to use” – Martin Armstrong
Martin Armstrong forecasts electric vehicle adoption and he thinks that rising gas prices will accelerate adoption
“As gas prices soar, the plan to switch to electric vehicles (EVs) seems more appealing to the average consumer which is the secret behind the curtain to make gasoline too expensive to use,” wrote Martin Armstrong.
Government policy is also likely to accelerate Martin Armstrong forecasts electric vehicle adoption view
“The US will now require auto manufacturers to meet a fleetwide average of 55 miles per gallon (mpg) by 2026, which is up from the 43 mpg standard set by Trump. The current standard for 2021 models is 40 mpg,” wrote Martin Armstrong.
Government policy is promoting EVS as a cost-saving alternative to ICEs
“The Environmental Protection Agency is saying that moving to EVs can save owners between $210 and $420 billion through 2050, and owners will save an average of $1,000 per year,” wrote Martin Armstrong.
In Europe, the European Union is planning the ban of new gas and even hybrid cars in less than two decades.
“The European Union has proposed phasing out gas-powered internal combustion engine vehicles by 2035, part of a sweeping new plan to drastically reduce carbon emissions on the continent. … By 2035, though, the EU proposes a 100 percent cut, effectively
Martin Armstrong forecasts electric vehicle (EVs) adoption in tandem with government subsidies
“A lobbying group the Alliance for Automotive Innovation is calling for federal support to meet the new requirement, stating that the industry will not be able to meet the criteria without government funds. The infrastructure bill passed earlier in the year will allow more funding for public charging stations.
Others in the industry are claiming that automakers must conform to EVs to stay competitive. Tesla’s growth has been widely praised. GM is releasing two new electric cars and will begin producing the GMC Hummer EV next fall. BMW plans to unveil an all-electric M badge car. Jaguar Land Rover noted it would test a hydrogen fuel-cell prototype. Mercedes plans to manufacture ten new models of EVs by the end of next year. Ford, Nissan, and Mazda will join in on the action too. The list goes on and on.
Electric vehicles only account for 3% to 4% of cars on the road in the US. Still, that percentage will rise in the coming years as EVs become more affordable to the average consumer and companies continue to develop the technology,” wrote Martin Armstrong.
“the risk for non-Chinese investors in Chinese EV stocks relates to the ownership issues. China prevents foreigners from owning Chinese stocks, which is unfair as there is no citizenship requirement for owning American stocks” – Wealth Training Company
Where we see the fastest adoption of Evs is in the world’s largest EV market China
China has the fastest-growing middle class, and we believe the fundamentals for local manufactures are smiling.
Stars are aligning for China to be the next global EV brand leader. Could NIO be it?
The world’s factory has all the components and the skillset domestically to produce a winning global EV brand. Moreover, China has the domestic demand to sell its Evs to its home market. In other words, China can build a winning EV brand without even the need to export.
Martin Armstrong forecasts electric vehicle (EVs) adoption and where we see the best opportunity is in China
However, the risk for non-Chinese investors in Chinese EV stocks relates to the ownership issues. China prevents foreigners from owning Chinese stocks, which is unfair as there is no citizenship requirement for owning American stocks.
So American Depositary Receipts (ADRs) were created to allow investors exposure in Chinese stocks. Our understanding is that the Chinese CEO, or his legal agent, deposits a chunk of shares into a fund, and then the fund’s shares are traded on the exchange to non-Chinese investors.
So investors in ADRs own shares in a fund but don’t hold shares directly in the company.
It is similar to an ETF, so what is the problem? If the SEC approved these ADRs for listing, then these ADRs should be legitimate.
Perhaps Ray Dalio, who seeks alpha in China, can shed light on this one?