[sgbuffett]

Electric vehicles (EV), including battery electric and plug-in hybrids, made up 7.2% of global car sales in the first half of 2021, up from 2.6% in 2019 and 4.3% in 2020.

Previously the believe is Tesla, Nio, etc are new fangled disruptive companies that will cause traditional  car makers to go down hill. And that traditional car makers are far far behind. This is not true.

In 2019, 97% of cars are ICE (petrol) vehicles so they can't be bothered because market is too small. Even last yr 93% of cars are petrol cars....so it is not significant. But this year they will all start to seriously transit. This means existing EV players who hog the news will have to share it with giants like Volkswagon and Toyota. ..

Electric cars contrary to what many YouTubers and "gurus" claim is not a disruptive technology that left Toyota and VMW behind and struggling. An electric car is easier to build and has lower complexity. All the traditional car makers already can build them but can't be bothered because market is so small. The key technology is in a few parts only the semiconductor IGBT and battery ...the motor itself is actually low tech. China players like CATL and BYD are ramping up to supply these components.

Perhaps the most complex part where existing players have a real edge is self driving. But this software are developed by players like Baidu and Mobile Eye who plan to license it and level the play field.

Considering all this,  the EV market will just transform to the traditional car market and all the excessive valuations of players in EV space will start to vanish.

A traditional car company has PE ratio of 5 to 8...but Tesla has 300 and Nio still making losses.

Once the hype slowly decline ...all these companies  will be view as manufacturing companies.

The big winners I see are the software companies that make the Operating software for these cars. One is MobileEye which is clearly ahead ...the other is Baidu which will take the China market.