Over the past few months, I’ve noticed an increasing number of BYD cars alongside Teslas on Singapore’s roads. It made me wonder—perhaps the EV market isn’t just about Elon Musk and Tesla. Could it be a promising investment opportunity? To find out, I decided to delve deeper into the EV industry.
Pls note this is not investment advice and exercise due diligence when investing.
1. EV Industry Overview
According to the International Energy Agency (IEA), global EV sales exceeded 17 million units in 2024, reflecting the rapid expansion of the market. Increasing consumer adoption, alongside strategic investments by manufacturers and governments, is propelling electric mobility forward. If current trends continue, the IEA projects that EVs could account for over 40% of global new car sales by 2030.
China remains the world’s largest EV market, with nearly half of all new cars sold in 2024 being electric. Scandinavian countries lead in EV adoption, with Norway at the forefront—80% of its new car sales were EVs. Interestingly, while Tesla dominates the U.S. EV space, adoption in the U.S. lags behind Europe and China. In 2024, EVs comprised over 10% of new car sales in the U.S., with growth continuing but at a slower pace than other regions.
As the industry shifts from rapid expansion to a recalibration phase, companies are adapting their strategies to evolving customer demands and regulatory changes. Analysts suggest this transition will enhance efficiency and sustainability, fostering stronger business models, increased domestic component production, and the integration of advanced battery and connectivity technologies.
2. Battery Technology
Battery technology is arguably the most exciting and critical aspect of the EV industry.
At its core, an EV battery relies on chemical reactions to transfer lithium ions between the anode and cathode during charging and discharging. Charging forces lithium ions to one side, while driving sends them back, releasing energy to power the vehicle’s motor.
EVs predominantly use lithium-ion batteries due to their balance of energy density, efficiency, and durability. Most models offer a driving range of 200–300 miles per charge, while premium models exceed 400 miles. Advances in battery capacity and weight reduction continue to enhance vehicle performance. However, lithium-ion technology has limitations in energy density, posing challenges for manufacturers striving for longer ranges. Nonetheless, battery costs have plummeted—from over $1,000 per kilowatt-hour to below $150—making EVs more accessible and affordable.
The industry is actively exploring next-generation batteries beyond lithium. Solid-state batteries, for example, use a solid electrolyte instead of a liquid one, enabling faster charging, enhanced safety (lower fire risk), and increased energy density. Another promising development is sodium-ion batteries—sodium is far more abundant than lithium, potentially making EVs more sustainable and cost-effective. However, sodium batteries have lower energy density due to the heavier nature of sodium ions, limiting their suitability for high-performance EV applications.
China dominates the EV battery sector, controlling between 67.5% and 80% of the global market. In Q1 2025, six Chinese companies accounted for 67.5% of total global EV battery supply.
Two major players stand out:
CATL (Contemporary Amperex Technology Co. Limited): The world’s leading EV battery supplier, with an installed capacity of 84.9 GWh—a 40.2% year-over-year increase. CATL continues to expand its presence in Europe and North America.
BYD: While widely recognized as an EV manufacturer, BYD is also a battery supplier. In Q1 2025, BYD recorded a remarkable 62% year-over-year growth, reaching 37 GWh in battery installations. Its integrated approach—combining EV production with battery manufacturing—offers cost advantages and faster innovation cycles, optimizing battery solutions for its vehicles.
3. Investment Thesis
I’ve been monitoring the EV industry for a while, particularly the battery giant CATL. Its dominant position in battery technology makes it a compelling stock. CATL is listed on the Shenzhen Stock Exchange (ticker: 300750) and currently trades around 250 CNY. Unfortunately, I couldn’t purchase shares since they’re restricted to accredited investors.
One alternative is investing through an ETF. I currently hold shares in the Global X China Electric Vehicle and Battery ETF (ticker: 2845 for HKD, 9845 for USD), listed on the Hong Kong Stock Exchange. Managed by Mirae Asset Global Investments, this ETF was launched in January 2020 and has an expense ratio of 0.68%, with assets under management (AUM) around 1 billion HKD. The fund targets Chinese companies positioned to benefit from growing EV adoption, including manufacturers like BYD, which is currently its largest holding.
From what I see, China’s EV industry will continue to grow and might even become the most dominant EV manufacturer in years to come. As of now I do have a position in this etf and will continue to add on if the opportunity arises.
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