A Unique Way To Play The Coming $700 Billion Electric Vehicle Boom

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06 Jun, 2023, 08:00 ET

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FN Media Group Presents Oilprice.com Market Commentary

LONDON, June 6, 2023 /PRNewswire/ -- The global electric vehicle market is a crowded space valued at nearly $194 billion in 2022 and set to reach an astounding $694 billion by 2030. Now it's time to find more unique opportunities as many of these smaller car manufacturers find the market being overtaken by the traditional auto giants like Ford, Chevy and GM. Mentioned in today's commentary includes: Ford Motor Company (NYSE: F), Honda Motor Co. Ltd. (NYSE: HMC), General Motors (NYSE: GM), Nio Inc. (NYSE: NIO), Blink Charging Co. (NASDAQ: BLNK).

Opportunity abounds, but phenomenal cash burn and a slower path to profitability have rendered this crowded space rather risky. But the EV market isn't just about the roadways …

The waterways are going electric, too, and the playing field is much less chaotic, with the clear first-mover advantage going to Vision Marine Technologies (VMAR), with its proprietary PowerTrain outboard motor and the launch of the fastest electric speedboat in its class on the market.

The electric boat market is set to grow at a CAGR of nearly 13%. By 2030, this market will be worth almost $15 billion, and it's much easier to navigate. As we speak, the multi-billion-dollar boat battery market is undergoing its biggest transition since the invention of the boat motor itself.

And VMAR has successfully developed the world's most powerful marine electric motor, with proprietary technology. First revenues from the PowerTrain are coming this year, along with a second revenue chain in the form of a disruption to the boat rental market. Sailing legend Ian Bruce is behind VMAR, and unique among EV offerings, the company has zero debt and is positioned to be free-cash-flow positive in 2024. That's a good starting point for an electrified market that has few (if any) players who aren't burning cash at an untenable rate.

The Proprietary Tech Powering Clean Boating

The newly unveiled H2e Bowrider speed boat took the Paris Boat Show by storm in December, and made its official debut in February in Miami, with deliveries to start this summer. The boat, developed in partnership with Four Winns, is special because it showcases VMAR's E-Motion 180 HP electric outboard motor.

That motor, with proprietary PowerTrain technology, makes the H2e Bowrider the first all-electric series production bowrider on the market.

The E-Motion is the first fully electric, production-ready, high-performance 180 HP, which makes it the key market disruptor. With its proprietary technology, which includes the batteries, the engine and the software, Vision Marine's E-Motion is now the only turn-key solution for boat manufacturers in its class. That's a strong first-mover position to be in at the critical junction of a high-dollar energy transition.

Vision Marine's (VMAR) E-Motion fully charges overnight with no additional infrastructure, has the highest horsepower engine in its class on the market, offers the first-ever custom design marine battery packs, and it all comes in at a lower cost than any competitors.

Flipping the Switch on the Boat Rental Market

VMAR has a broader vision beyond the most powerful outboard electric motor in its class, too: They also plan to flip the boat rental market and turn it electric.

That $5-billion+ boat rental market (think: thousands of resorts and marinas worldwide) is ripe for flipping, and VMAR's flagship Newport business managed to serve 300,000 clients in the first three years, annualizing $4 million in revenues with a 35% profit margin. For 2023, Vision Marine will be rolling out two more fully-owned electric boat rental locations and launching their franchise model. By 2024, it's full speed ahead with scaling. The company's proprietary technology gives it the opportunity to become one of the NASDAQ's most exciting EV plays.

By the end of 2024, Vision Marine expects to free-cash-flow positive, and by 2025, it expects to have two profitable and growing divisions, after which the scaling is expected to gain further momentum.

Zero Debt at a Time of Serious Electric Cash-Burn

This summer should be interesting on the water. Vision Marine (VMAR) not only has developed the most powerful electric motor solution on the recreational boating market, but it's also a member of an elite club in this segment that has proprietary technology, zero debt and clear growth runways.

With investors pouring money into anything electric in the wake of a major European push for zero-carbon and the Biden administration's clean energy-friendly Inflation Reduction Act (IRA), a company that has already staked its claim on the market with a proprietary tech product and is going into its first major expansion push with zero debt has more than just first-mover advantage.

Traditional Automakers Are Still Cashing In On The EV BoomFord Motor Company (NYSE: F), one of the stalwarts of the auto industry, is making commendable inroads into the electric vehicle (EV) segment. It made headlines with the Mustang Mach-E, its first all-elective SUV, that rivals the best in the EV market, proving that Ford can transition its pedigree of quality and performance into the green energy arena. This car won accolades, becoming a beacon of Ford's commitment to electric vehicles.

The excitement doesn't stop there. Ford launched the all-electric F-150 Lightning, electrifying its most popular and top-selling model. The F-150 has a vast customer base and the electric version could accelerate the adoption of EVs in the pick-up truck segment, which is a largely untapped market. This strategic move could potentially bring significant revenue growth.

For investors, Ford's transition to EVs is worth noting. The company plans to invest over $22 billion in EVs by mid-2020s, indicative of its strategic commitment to capture a significant share of the burgeoning EV market. As Ford continues its aggressive push into electrification, it offers investors an opportunity to be part of a company marrying a rich heritage with a commitment to future innovation.

General Motors (NYSE: GM) is another established player making a serious commitment to an electric future. GM's 'Zero Crashes, Zero Emissions, Zero Congestion' vision shows an ambitious, sustainable plan. The automaker is planning to release 30 new global electric vehicles by 2025, demonstrating the scale of its EV commitment.

Not only is GM focused on passenger EVs, it's also targeting the commercial vehicle sector and autonomous vehicles, broadening its potential market reach. Their proprietary Ultium battery technology aims to provide industry-leading range and flexibility, a potential game-changer in the EV market.

From an investment perspective, GM's bold moves into electrification reflect an opportunity for significant growth. The company's planned investment of $27 billion in electric and autonomous vehicles by 2025 represents one of the largest commitments in the sector. This transition strategy, along with its technological advances in EV batteries, could cement GM's position as a leader in the EV market, offering investors a compelling investment proposition.

Honda Motor Co. Ltd. (NYSE: HMC) is another traditional auto giant that is steering toward an electrified future. While Honda's path to electric vehicles might seem slower compared to Ford and GM, their planned shift to 100% sales of electric and fuel cell vehicles by 2040 indicates a long-term commitment to sustainable transportation.

What makes Honda's approach unique and investor-friendly is its comprehensive roadmap that includes hybrids, plug-in hybrids, battery EVs, and fuel cell vehicles. This broad mix of electrified vehicles provides diversity and caters to a wide array of consumer preferences and regional regulatory demands.

Investors should pay attention to Honda's strategic partnerships, another sign of its commitment to electric mobility. It has collaborations with GM on EVs and other firms on battery technology. These alliances should accelerate Honda's foray into the EV market and mitigate the risks associated with the high costs of EV development. Honda's reliable brand, combined with its growing focus on electrification, could offer a balanced investment opportunity in the EV market.

Nio Inc. (NIO) is often referred to as the 'Tesla of China' and is known for its state-of-the-art electric vehicles and innovative technologies. The company offers premium smart electric SUVs with different models designed to suit different customer needs. The ES8, ES6, and EC6 models have gained widespread popularity in the Chinese market, not just for their high performance but also for their sleek design and advanced features like autonomous driving.

Nio has pioneered the battery as a service (BaaS) model, which allows consumers to purchase the vehicle without the battery, thus significantly reducing the upfront cost. Consumers can then lease the battery and swap it at numerous swapping stations Nio has built across China. This innovative model not only addresses the issue of charging infrastructure but also eliminates consumers' concerns about battery degradation.

As of early 2023, Nio has been showing robust growth and expanding its market beyond China. It made a bold entry into Norway and plans to enter more European markets in the near future. With a strong emphasis on technological advancement and consumer experience, Nio has positioned itself as a major player in the global EV industry.

Blink Charging Co. (BLNK) is a leading owner, operator, and provider of electric vehicle (EV) charging equipment and networked EV charging services. As the EV market continues to grow, so does the demand for charging infrastructure, and Blink is well-positioned to capitalize on this trend. Its charging stations are strategically placed in high-traffic areas like airports, shopping centers, and hotels, providing accessible charging solutions for EV owners.

Beyond hardware, Blink's cloud-based software that operates, maintains, and tracks all of the EV charging stations in its network sets it apart from competitors. It offers property owners, managers, and parking companies a comprehensive and customizable EV charging solution while generating revenue through equipment sales, charging services, and software licensing.

Like any company in a rapidly growing industry, Blink faces competition and the challenges that come with scaling production and infrastructure to meet demand. However, with increasing governmental support for clean energy and infrastructure and growing consumer interest in EVs, the outlook for companies like Blink Charging Co. appears promising.

By. James Stafford

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