scroll

Investing in EV companies

Advanced Search

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 17/05/2025

Investing in EV companies

Hi MM Team, Given the general electrification of everything mantra, and the growth of Chinese EVs, especially BYD, I’m wondering what your perspective is to investing in them. Would you consider including BYD in your International portfolio? What would be the criteria & price point & growth expectations? Many thanks Glenn

Answer

Hi Glenn,

Lots of questions in there, especially in such a rapidly evolving market. Everything we hear and read around BYD sounds impressive but this has largely been reflected by the SP. We cannot help but draw comparisons with Tesla (TSLA US) a few years ago, and its more than halved from its high this year. Another impressive player enters the fray and BYD might start to struggle, a number are already claiming impressive battery charging times with more likely to join the fray:

Zeekr claims that its new lithium iron phosphate (LFP) battery, dubbed the “Golden Battery,” can charge from 10% to 80% in 10.5 minutes.
Gotion’s claims its G-Current battery achieves a 10% to 80% charge in 9 minutes and 48 seconds.
Farasis Energy has developed a 6C LFP battery capable of charging from 10% to 80% in 8.55 minutes.
BYD has demonstrated that its latest battery technology can add 400 km of range in just five minutes of charging.
CATL introduced the second-generation Shenxing battery, capable of adding approximately 520 km (323 miles) of range in just five minutes of charging.

Ignore the details, the picture is clear, the EV and battery technology landscape is evolving so fast and picking a winner is a tough ask. We therefore prefer to play the next wave of EV adoption in a couple of different ways:

Copper is going to used in all EV’s so faster adoption will benefit the industrial metal – gains will be more muted than some of the names above but so will the likely losses.
We believe China will continue to lead EV adoption and technology hence ETFs facing towards Chinese tech is another way to gain exposure to the evolution in relative safety.
More boradly, we have a greater level of interest in investing around the edges of EV adoption, not the car manufacturers themselves i.e. we think Telsa’s value in the future will be underpinned by their automation smarts, and robotics, than actual car production.

chart

BYD Co Ltd (BYDDY US)

LAST UPDATED 16/05/2025 17:46

Latest Reports

Weekend report 17/05/2025

Weekend Q&A: The RBA will be centre stage this week, with a rate cut expected

The ASX 200 ended the week up +1.4 %, taking the month's gains to +2.7%, as the index pushed within striking distance of February's all-time high. The energy and tech sectors drove the gains, both ending the week by more than 5%, while defensive/rate-sensitive stocks dragged the chain, i.e. “risk on” was the order of the day. Out of the mainboard's 11 sectors, only the consumer staples, Utilities, and real estate sectors closed lower. The US-China “Trade Truce” set the platform for a strong start to the week, before the Australian market posted its highest level in three months on Friday after soft US economic data paved the way for interest rate cuts in Australia and the United States. The positive statistics are continuing to line up:

Afternoon report 16/05/2025

The Match Out: ASX books another strong week, now up 16% from the lows

SPI Futures were uber bullish overnight up nearly 100pts, outpacing gains in other markets and that drove a bump on open for stocks, however, it didn’t last with the main board giving back the lion’s share of gains as the day progressed, ultimately trading more than 50pts off the early highs – a sign of exhaustion in the short term after a great rally in stocks.