For daily mission, thanks for read

Investment bank Bernstein (Bernstein) released a new report saying that traditional automotive original equipment manufacturers (OEMs)

Today, 99% of the world's cars are sold, of which 97% are internal combustion engine vehicles and 2% are pure electric vehicles. In addition, the bank also pointed out that the total market value of the 15 largest original equipment manufacturers is 1.2 trillion US dollars, which is only slightly higher than the $1.1 trillion market value of pure electric vehicle manufacturers such as Tesla. It is worth noting that pure electric vehicle manufacturers currently account for 1% of the total global sales volume, but 45% of the market value of the automobile industry.

Bernstein analyst Toni Sacconaghi said: “VW believes that electric vehicle manufacturers will eventually dominate the automotive world. In 2014, EV manufacturers accounted for 15% of all EV sales. Today, that figure is 28%. However, even if it eventually accounts for 50% of all electric vehicle sales by 2030 (this assumption may be a bit aggressive), it is difficult to justify the current valuations of these pure electric vehicle manufacturers.”

Bernstein said the market has taken into account that traditional original equipment manufacturers will not be able to provide competitive electric vehicle products in the future, or will lag far behind in this regard. Furthermore, investors seem to believe that each new electric vehicle produced by a new upstart will be able to generate significantly higher profits due to direct distribution and additional services such as autonomous driving.

In response, the bank believes that the automotive industry is an increasingly global and highly competitive industry, and that excess profits and technological innovation may be eliminated by competition over time, just like in history. As a result, each $10,000 fully automated vehicle would fundamentally change the auto industry's profit margin (and valuation) situation.