2020 will be marked as the end of an era in the automotive industry and the birth of the Electromotive™ industry. In the course of 2020, we will see the biggest transition into EV than at any time in history. As it is being said on CNN Business; “The great electric car race is just beginning.” According to industry sources, between 2019 to 2020 there are about 264 plus EV startups that raised an estimated $24B and estimated to be as many as 800 plus of them by 2025 and they will continue to grow at a rapid pace.
Please note, we are not trying to address this issue from the industry perspective, we are addressing this phenomenon from the investor’s point of view. We find ourselves asking the following; what drives such sharp growth? Is it real?, a “Hype” or just press driven and market enthusiasm? In the brief, we will try to shed some light on the topic from our internal research. Although needless to say, we are not an automotive expert, yet we are investing in technology companies that are trying to join the race.
it was stunning for me to discover that among those 262 plus EV startup companies you will find big brand names off the consumer and commercial electronics industry such as Sony, Sanyo, LG, B&O, Apple, just to name a few, and we might see in the future other companies such as Microsoft, Google, Apple, and other Tech Giants join the race. However, that is yet to change due to consumer demand. In a market survey held a few years ago consumers said: “Yes, U.S. Consumers Will Buy Cars From Apple And Google”. I believe that we might see the consolidation and M&A transactions between big Tech electronics companies and the tradition of automakers creating a complete new Electromotive™ industry. One thing is certain: we’ll be at the core of it all.
The Industry Markers:
We have identified some key driving markers that we assert contribute to the movement or at least influence the direction it is going.
- There is a massive push by the government and customers for a cleaner energy market across the globe as global warming becomes a real and present danger.
- The cost and barrier for entry are much lower for EV and require much less capital than the traditional automotive industry from the past.
- Design, manufacturing, and assembly become much less complex and rely on simpler infrastructure especially with Industry 4.0 and 5.0 technology is just around the corner.
- EV requires much less in maintenance and warranties cost.
- There is a beginning of industry common platforms for the assembly of EV that is accessible to all.
- Autonomous driving technology is easier to implement and perform much simpler and safer in EV than in traditional vehicles with more complex mechanical moving parts.
- As mentioned above, recent consumer surveys there is a huge place for tech brands to take over the segment
As battery technology evolves and travel mileage ability to be extended.
Although on the surface it looks very promising and good for the environment, there are many challenges before anyone (probably more than one) will win the race. Here what we identify some of the key obstacles and barriers along the way:
- Most current electrical grids are not designed to support that kind of a massive shift in a short time frame.
- Most road systems infrastructure globally is not built to support Electromotive™ and will have to be refitted over time and will come with a huge cost.
- Automotive service off the major roads and highways, such as gas stations and service stations, will be forced to massively convert to a complete electric power provider that will require a complete overhaul.
- Battery technology is not there yet and we have a massive issue with waste management and recycling
- Quality and durability and the life cycle of Electromotive™ products are not yet clear and defined.
- The current automotive service providers such as auto shops, dealerships, etc, will be forced to upgrade their entire operation and become much more tech-oriented.
Looking from the wide-angle outlook on this major evolution we identified a select number of Industry sectors we believe present the highest level of opportunities:
- Alternative Electric Power
- Transportation Infrastructure
- Supply chain
- The service & support
- Battery Tech
- Autonomous Tech
It does not mean that there are no other sectors that will experience some level of growth but all the data sources point to the sectors we listed above is a high potential growth sectors.
So our conclusion regarding this major evolution is that progress is inevitable; we have a choice to join the race or missed opportunity. it is clear that one way or another Electromotive™ will become the new industry. What shape or form it will have at the end, we don’t know, yes it is coming and it’s coming to Fast & Fury. Traditional Automotive companies will become big tech companies and some already in the process and possibly a hybrid between consultation makers or technology providers.
So regardless if you believe it or not, you can’t ignore progress!
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