The changing face of motoring
The iconic Model T Ford started rolling off the production line on 1 October 1908, opening up motor travel for countless Americans who had previously been unable to afford a car.
Prior to the introduction of the Model T, cars had been constructed by hand, making them a luxury item only accessible to the super-rich. The Model T, often affectionately known as the Tin Lizzie or Leaping Lena, was the first motor vehicle to be built on an assembly line at the Piquette Avenue Plant in Detroit, Michigan, helping keep costs down.
By 1927, 15 million Model T cars had been produced,1 with Henry Ford having succeeded in his aim of creating “a motor car for the great multitude”.2
More than a century on since the Model T was launched, Ford continues to produce many of the world’s popular cars. The Ford F-Series was the world’s best-selling car of 2018, and the only vehicle to break the million mark for registered new sales.3
The move towards electric vehicles
The automobile sector has come a long way since, with the days of the internal combustion engine now appearing numbered.
Sales of new petrol and diesel cars are set to be phased out by 2040 in the UK and be replaced by more environmentally friendly battery-only vehicles. Other countries plan to introduce a ban on sales of polluting vehicles earlier, with Norway pledging to ban petrol and diesel vehicles by 2025 and India by 2030.4
There is already a much greater focus on battery-powered vehicles globally, with the electric car fleet exceeding 5.1 million in 2018, up from two million the previous year. China is currently home to the world’s largest electric car market, followed by Europe and the United States.5
Tesla has so far dominated the global electric car market; however, several other manufacturers have recently announced their intention to expand electric car production. These include Porsche, which will release its electric Taycan model by the end of 2019, expected to have over 310 miles of range on one charge, and Volkswagen, which by 2022 will release its ID Buzz, a revamped electric version of its iconic camper van.
Changing technologies, such as the introduction of electric and hybrid cars, can potentially create opportunities for investors. However, as the dotcom bubble proved, it is essential to tread carefully, as for every new technology that succeeds, there are plenty that fail.
Whilst it is possible to buy shares directly in manufacturers of electric vehicles, investing in shares of single companies is a risky approach. Investors may instead prefer to consider diversifying holdings in a collective investment with exposure to electric car producers, or which holds companies involved in lithium exploration, one of the key components in electric car batteries.
1 The Daily Telegraph, A history of the world in funny puns, August 2017
2 The Henry Ford, Ford's Model T: A car for the great multitude, January 2015
3 Motoring Research, World's best-selling cars 2018, February 2019
4 The Independent, Ban new petrol and diesel cars by 2032, October 2018
5 International Energy Agency, Global electric vehicle outlook 2019, May 2019
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