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Electric Dreams

Published on 25/03/2021

In mid-February, car maker Jaguar confirmed that they will only be building all-electric cars by 2025. This is big news for conservationists and environmentalists, (some) car enthusiasts, battery makers and of course investment analysts.

This non-hybrid, non-gas move doesn’t yet cover the Land Rover arm of the business, however this division is moving closer towards electrification over the next five years with a view to having 60% of Land Rover sales being fully electric-only by the end of the decade.

Adding to this, JLR’s CEO Thierry Bolloré set a 2039 target for the company to become a net-zero-carbon business. They’re not the only British luxury car brand to make an electric only pledge - it puts them in firm competition with Bentley who is due to launch their first electric car in 2025, and producing electric only cars by 2030.

For environmentalists, the benefits are obvious. Fewer petrol cars on the road, means fewer carbon emissions being pumped into the air. Car enthusiasts may not take this news as joyfully, many petrol heads think electric engines are soulless - the proof for them, will be in the pudding.

But for battery makers, and miners of the minerals needed to make electric car batteries, this is a growing frontier, and a time to get excited! The same goes for analysts in the tech, materials and consumer discretionary sectors - this move by car manufacturers to a solely electric offering has opened up doors to new companies and new investment ideas.

The most common types of battery used in electric vehicles is the Lithium-ion battery - which is just a bigger version of the one in your phone or laptop. They’re formed of certain elements including carbon or graphite, metal oxide and lithium salt. These elements make up positive and negative electrodes, which combined with the electrode, produce a current to power the car.

At present, approximately 80% of the components that make up the battery are recyclable - meaning when the batteries come to the end of their life, they can be stripped into the separate raw materials and re-used. Another tick for the environmentalists, but also another win for the analysts. How many more companies are there that do this kind of work? Then there’s the utilities companies supplying the power to run the cars, and the wind turbine manufacturers down the line from them... Soon there will be investment ideas spilling all over the track.

And that’s the amazing thing about investment ideas - you start with one topic, and all of a sudden, like tree roots, you branch out to further companies, and more and more and more ideas.

At Upside, we get excited about ideas on any listed company, in the ESG space or otherwise. Our ecosystem is built on choice - whether petrol head or electric dreamer, Upside welcomes all your ideas.

For analysts this means it’s a space to flex those research muscles, to expand horizons and understand a company, it’s supply chain, it’s management team, it’s balance sheets, and make long-term predictions. Predictions that are weighed and measured by Upside’s machine learning supercomputer. And for the investors it’s a hypermarket of ideas, each with their own analysis, on which to build the perfect portfolio.

There’s a science to being right.

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