Investing opportunities in the automotive industry: profiting from EVs

The penetration rate of the electric vehicles today is less than 1%, but in nine years from now, it is expected to reach 38% of the global market. For this reason, the automotive industry is undergoing the biggest change since its inception: the transition from internal combustion engine to electric motor. During my work, I started trying to figure out what is an electric vehicle (EV) in all its major variants, trying to analyze the reasons why this technology is so debated since the birth of the car. There are 5 key drivers of the industry: 1) lithium battery 2) partnership (through automakers, battery makers, infrastructure providers and Government) 3) future cost of oil 4) cost and source of electricity and 5) public programs. In the second part, my attention was devoted to the analysis of all the investment flows in the industry until today. Moreover, I defined the markers of potential investment success. To understand the value proposition, the reader will find a risk-reward analysis of the industry. I identified the three most important stakeholders (Automakers, Battery suppliers, Infrastructure Providers and Government), defining for each of them a reward/risk ratio.