Auto sector in the early stages of a ‘green tidal wave’: Analyst
Wedbush Securities Managing Director & Senior Equity Analyst Dan Ives joins Yahoo Finance Live to discuss the outlook for electric vehicles amid the chip shortage.
Video Transcript
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ZACK GUZMAN: Welcome back to Yahoo Finance Live. As we've been highlighting here, there's been a big push in electric vehicles, not only from the investor front, but also from purchasing popularity. We've seen some traditional auto manufacturers really lean into that particular sector, including the likes of GM and Ford. But Wedbush's Dan Ives is taking a closer look in terms of how sales could be boosted in the years to come, more than tripling over the next four years.
And for more on that, I want to bring him in. Wedbush Securities Managing Director and Senior Equity Analyst Dan Ives joins us via the phone here. And Dan, I mean, we've been highlighting this. I mean, a lot of the opportunity has been there, as we've seen auto manufacturers lean into EVs. But I guess, some of the stocks have pulled back and not necessarily have enjoyed anything near the same enthusiasm. So talk to me about when you see maybe some of that returning.
DAN IVES: Yeah, I think we're seeing it right now. I mean, it's the early stages of a green tidal wave. I think investors are digesting the stocks, but in my opinion, over the next decade, it's going to be a massive conversion to EVs. I view this as an opportunity. And I think it's the start of what's going to be the biggest transformation to the auto industry since the 1950s, despite the choppiness you're seeing with the chip shortage.
ZACK GUZMAN: Yeah, I mean, we've seen that chip shortage hit some of these stocks, particularly with Nio and Xpeng who had talked about that weighing on production and the need to get their chip issues shorted. I mean, when you kind of look at that, what's the optimism there in just assuming that that's going to play out to benefit EVs?
DAN IVES: Well, we view this as a near-term headwind. But I think it starts to moderate into 2022. And I think that's why right now, [INAUDIBLE] EVs. When I look at the likes of GM and the conversion story, they'll be talking about that [INAUDIBLE] next day or two Tesla. But then you look at the Chinese players, Nio, Xpeng, others, I view it as just the start of a massive trend that we're seeing play out. The chip shortage, I still view it as something that moderates into 2022.
ZACK GUZMAN: Yeah, I mean, when you look at maybe some of the ways to play this, obviously, Nio and Xpeng China-focused. When you look at Tesla, one of your favorites there, been a leader in the EV space for a while. But you also like GM and what they've been able to do. You see more than 50% upside in that stock. But we've seen issues with their EVs, mainly the Bolt catching fire. I mean, talk to me about why you seem so confident in GM able to catch up.
DAN IVES: Yeah, I view GM as one to really focus on where everything is going with [INAUDIBLE] as a foundational part of the battery technology. That's going to be one of the keys of GM.
ZACK GUZMAN: Yeah, the battery technology piece is rather important. We've seen Tesla kind of really focusing on that when it comes to stressing their lead over other EVs. I suppose maybe there is one last question here for me in regards to some of these incentives to get consumers to shift over to EVs. It's been a point of emphasis in the Biden administration in terms of climate goals. But we've seen those kind of wane, I guess, a little bit. What's the expectation there that that could also juice some of the growth numbers in terms of you seeing 20% growth by 2030?
DAN IVES: Well, I think tax credits are going to be key. And that's why now it's the carrot and the stick. I think it's important to have those incentives because I think ultimately, that's something that's going to get to what we see as 10% EV conversion by 2025. But credits are going to be key, as well as from an infrastructure, in terms of charging stations and others.
That's why I think you also play the supply chain there. It seems like life cycle on the recycling side, there's a number of other charging ways to play this. I think you put it all together. That's the way how we view this green tidal wave playing out with names like GM, Ford continuing to convert to EVs.
