In nine years, it’s expected nearly 70 per cent of all autos sold will be electric or hybrid from the current less than 10 per cent.

How can investors capitalize on this massive trend over the next several years.

Morningstar features a fascinating chart detailing forecasted growth for electric vehicles (EV) and hybrids, and four stock ideas of companies that can feed the EV supply chain.


by Seth Goldstein, CFA, Equity Analyst, Morningstar

Morningstar analysts forecast massive growth in electric vehicle adoption around the world.

By 2030, EVs and hybrids will be two out of every three autos sold, according to Morningstar’s 2021 Electric Vehicle Observer.

This growth will be driven by cheaper EV offerings, EV performance parity with internal combustion engines, and expanded charging infrastructure throughout China, Europe, and the United States.

Beyond automakers, EV growth will create investment opportunities across several industries.

Investment Opportunities Exist Beyond Automakers

Increased battery EV adoption will evolve and transform multiple industries throughout the supply chain.

As shown below, the EV supply chain begins with raw materials and specialty chemicals, which are used to make EV-specific auto parts that ultimately end up in vehicles, including batteries, auto components, and technology components.

From there, auto original equipment manufacturers assemble the parts just like in internal combustion engine vehicle manufacturing.

Though not a direct part of the supply chain, the buildout and operation of charging infrastructure also creates opportunities.

For four companies Morningstar believes are undervalued and well-positioned to benefit from electric vehicle growth in the coming years, click here.

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