Tesla (Getty images)
The transportation and automotive industries are going through enormous revolutions, as electric cars have entered the daily lexicon and autonomous vehicles will soon as well. Though investors have already captured much of the gains for the next wave of cars, there may be room to run in the space as they go from niche to a significant portion of the market.
By 2040, electric vehicles are expected to be 35% of the new car market, according to data published by Bloomberg New Energy Finance. At that level, it would represent around 41 million cars, compared to less than 500,000 in 2015 and less than 1 million in 2016.
At the forefront of the revolution is Tesla, which has produced cars that people want to drive. Over the past five years, shares of Tesla have risen nearly 900%, trouncing any kind of return seen in the broader stock market averages. Led by CEO Elon Musk, Tesla has been the accelerant to usher in "the transition to electric and renewable and sustainable energy." Sales are growing at a 64% annual clip according to first-quarter results and demand shows no signs of slowing down.
While Tesla has gotten the bulk of the attention from investors, there are also other players in the space as well. From chip companies to battery makers to other automotive manufacturers, there are plenty of companies looking to benefit from these new trends, as they go from first adopters to the main stream.
Here are five companies that may benefit from electric and autonomous vehicles in the future.
Tesla (TSLA)
Tesla has been the poster boy for the electric car revolution and with good cause.
Musk has taken a company that was on the brink during the financial crisis of 2008 and turned it into one that is worth $50 billion -- even if he doesn't believe it's worth that.
Investors, reviewers, and most importantly, consumers love Tesla's cars, be it the Model X, the Model S or the upcoming Model 3, which Musk is trying to "anti-sell," to no avail.
As the Model 3 gets closer to its July production date, some investment professionals believe shares could be worth as much as $400, assuming the roll-out goes largely as planned.
Panasonic (PCRFY)
Though still thought of by some as manufacturer of electronics like TVs and stereo equipment, Panasonic's future may rest of electric vehicles.
Panasonic has been a beneficiary of the push to increase lithium-ion battery production around the globe, as traditional internal parts of the vehicle are replaced with ones suited for an electric vehicle.
Forecasts for the lithium-ion battery market call for 17% compound annual growth until 2021. This is due to "surging demand for portable and stationary energy storage, increasing environmental concerns and escalating number of solar & wind projects," with electric vehicles representing "one of the fastest growing clean energy segments across the globe."
Panasonic, which has partnered with Tesla on its Nevada-based gigafactory, trades in Japan, as well as the U.S. as an over-the-counter ADR (American depositary share). Its Japanese-based shares have risen nearly 40% over the past year, as demand for lithium-ion grows around the world.
Nvidia (NVDA)
Though many expect all electric cars to have some level of autonomy included in them, not all autonomous cars will be electric. And that's where Nvidia shines.
The graphics processor giant has seen its market cap swell over the past 18 months to more than $75 billion, as technologies like artificial intelligence, machine learning and autonomous driving become more prevalent to its already strong gaming business.
Led by CEO Jensen Huang, the companies has announced several key automotive partnerships in recent months, including ones with auto parts manufacturer Bosch, Audi, Baidu, as well as existing partnerships, including one with Tesla.
Ford (F)
Ford has come under intense scrutiny in recent weeks, as investor returns have badly lagged those of its competitors, most notably Tesla. With Mark Fields being replaced by Jim Hackett, who headed up the company's Ford Smart Mobility subsidiary, it's clear where Ford sees its future.
The company is betting big on car-access rather than just simply car-ownership, as it tries to become more of a services provider (akin to Uber or Lyft) than just an auto manufacturer.
When Ford announced the creation of Ford Smart Mobility in 2016, it was clear that the company wanted to capture as much of the $5.4 trillion in transportation services related revenue as it could.
It's attempting to do this with things like its SYNC infotainment system, building a predictive parking system known as GoPark, an increased focus on data and analytics, as well as expanding its fleet to include more electric vehicles (it currently offers just the Focus electric, but also a number of hybrids) and eventually, autonomous vehicles, which it is currently testing in a number of different states.
GM (GM)
Like Ford, GM has been surpassed by Tesla in terms of market cap as investors flock to the house that Musk built. But unlike its its Detroit Big 3 brethren (which includes Fiat Chrysler), the Mary Barra-led GM has been more proactive when it comes to the electric and autonomous car revolution.
GM's EV history dates back nearly a generation, to the EV1, which was produced for three years in the late 1990's. Though it did not sell well at the time, the company has ushered in a new age with its offerings, included the first mass-market electric vehicle, the Chevy Bolt.
Reviews of the Bolt have been good, though not as great as the more expensive Model S, but it's clear GM is trying to beat Tesla's upcoming Model 3 for mainstream supremacy.
And if that isn't enough, the company recently rolled out its Maven car-sharing service, to include the gig economy, which lets gig economy workers like those at Instacart have access to cars they do not currently own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
