The Single Biggest Threat To The Electric Vehicle Revolution

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Mar 08, 2021, 08:00 ET

LONDON, March 8, 2021 /PRNewswire/ -- While 2020 was the year electric vehicles went mainstream, 2021 has revealed a gaping flaw in the EV boom. Demand for the new technology has skyrocketed, both in the United States and across Europe. And this has major companies rushing to get onboard this surging trend. Mentioned in today's commentary includes: NIO Limited (NYSE: NIO), Intel Corporation (NASDAQ: INTC), NVIDIA Corporation (NASDAQ: NVDA), Microsoft Corporation (NASDAQ: MSFT), Advanced Micro Devices, Inc. (NASDAQ: AMD).

That includes everyone from legacy automakers like Ford and GM… to trillion-dollar tech giants like Apple. But the global pandemic has hurt the auto industry in a completely unexpected way.

With millions of people working, schooling, and entertaining from home, the number of tech devices has exploded beyond what we had just a year ago. And as the number of devices has grown, chipmakers have struggled to keep up with production of the semiconductors needed to bring those devices to life.

Nearly every electronic device requires these chips to run. Every iPhone, Xbox, laptop, TV and more. But because electric vehicles often require over 100 semiconductors, it's put them in a position where automakers don't have the pieces to build the cars. Which is why automakers are now seeing backlogs of 40+ weeks before they'll get the tiny chips needed to build their electric vehicles.

That means it could be another 9 months before they're able to add more chips to start production again in some places. And that could explain why companies helping to bridge that gap are surging right now.

Facedrive (FD,FDVRF), for example, has seen success growing its business over the last year.They recently acquired EV subscription company, Steer, from the largest clean energy producer in the United States. And while automakers are struggling to produce enough new vehicles for every customer to buy their own EVs...Steer's subscription model is putting a major twist on the traditional car ownership model, where customers can borrow one whenever they need it instead - and at a fraction of the cost.

With Facedrive's acquisition of Steer, customers pay a simple monthly fee like with Netflix, and they get access to their choice of EVs from a fleet at their disposal. It's these kinds of innovative moves that have helped Facedrive lock in a number of important partnerships and deals with government agencies, A-list celebrities, and major multinational corporations. And their business has multiplied several times over in a year where many companies suffered during the global pandemic.

As we monitor the growing semiconductor crisis, it's likely that creative solutions will be key in bridging the gap to the inevitable EV future.

Big Companies Feeling The Shock

The urgent semiconductor shortage has forced major automakers to dial back on production, which has companies like Ford and Volkswagen scaling down in the short-term. It's caused several automakers to even go as far as to shut down production plants altogether in some places. This growing issue is already costing automakers billions of dollars.

That's why they've gone as far as to develop a lobbying body that represents GM, Ford, and other US automakers. And they're pressing the government to convince Asian chipmakers to send more chips their way for EVs.

So instead of allocating chips to tech devices with higher profit margins like iPhones and computers…They hope to have them directed toward building new EV Suburbans and Mustangs.

Given the amount of resources being poured into solving this issue though, it's only a matter of time until production ramps up and EVs are expected to roll off the production lines faster than ever. But in the meantime, Facedrive's moves are putting them squarely in position to let more consumers drive in EVs And in addition to the monthly membership model used with Steer, their signature ridesharing service is making the need for new auto sales less urgent.

Their model is simple. When customers hail a ride, they can choose to ride in either an electric vehicle or a standard gas-powered car. Once they arrive at their destination, the Facedrive algorithm sets goes to work. It sets aside a portion of the fare to plant trees, offsetting the carbon footprint from the ride. Through next-gen technology and partnerships, they're giving their customers the option to ride in EVs without the need to buy their own.

Plus, Facedrive (FD,FDVRF) has added a food delivery service, at a time when delivery has exploded in popularity while folks have been stuck at home during global lockdowns. They're now delivering over 4,100 orders per day on average. And after growing to 19 major cities, they plan to expand to more cities throughout the U.S. and Canada soon. It's this kind of innovative thinking that has many feeling optimistic about the opportunities that lie ahead in the auto industry.

EV Markets Racing Ahead

As the issue of chip production gets ironed out, the surge in demand for EVs has many companies in the industry racing ahead toward massive gains.Tesla locked in over 700% gains on its way to becoming one of the largest companies on the S&P 500 last year. And Biden's "green" platform is giving the EV markets a healthy boost as well.

He recently announced he plans to build out 550,000 EV charging stations across the country, so it leaves no question what direction the auto industries will be heading in the years to come. With the growth we've seen in this area already, it's caused shares for companies like Plug Power to soar over 1,000% in 2020. And Facedrive has seen incredible gains of 834% over the last year as well. But while they're helping putting customers into EVs, they've also been busy doing their part to solve the other crisis on everyone's mind.

As the demand and interest in EVs continues on in 2021, there are sure to be growing pains on the path to ramping up chip production.And in the end, the companies seeing the biggest success may be those helping smooth out the gaps as we race towards a future driven by electric vehicles.

Much like Tesla, NIO Limited (NIO) got off to a rough start. In fact, it was even on the brink of bankruptcy in 2019. But China's answer to Tesla's dominance powered on, eclipsed estimates, and most importantly, kept its balance sheet in line. And it's paid off. In a big way. The company has seen its share price soar from $3.24 at the start of 2020 to a high of $50 earlier this year, representing a massive 1443% returns for investors who held strong.

And it hasn't stopped there. NIO recently unveiled a pair of sedans that would make even the biggest Tesla devotees turn their heads. The vehicles, meant to compete with Tesla's Model 3, could be just what the company needs to pull back control of its local market from Elon Musk's electric vehicle giant.

Leading a revolution on another auto-revolution is Waymo, a subsidy of tech giant Alphabet Inc. Waymo may just be the de facto leader in the emerging autonomous vehicle industry. It's already had cars driving themselves across the United States for several years. In fact, in Arizona alone, Alphabet's self-driving cars have logged over 6.1 million miles. To put that in perspective, that means that Alphabet's autonomous cars have driven the distance between New York City and San Francisco over 2100 times. Or, as the company explains, "over 500 years of driving for the average licensed US driver."

While these tests are extremely promising for Alphabet's Waymo, there are still some hurdles to overcome. First and foremost, these lengthy trials took place in Phoenix, a city not exactly known for extreme weather. Second, an issue that may frustrate many drivers, the vehicles operated in a sort of hyper-cautious mode, driving at slower speeds and taking sometimes unnecessary precautions to avoid conflict.

And though Alphabet gets a lot of the credit for the autonomous vehicle revolution, a widely loved and wildly popular chipmaker is at its core. Intel Corporation (INTC) and Waymo teamed up way back in 2017, and have worked together to fine tune their technology together ever since. Through their mutual knowledge of hardware and software, the tech giants have made leaps and bounds towards building the car of the future.

In addition to its efforts with Waymo, Intel has also been on the forefront of developing its own artificial intelligence and vision hardware. Back in 2017, it acquired MobileEye, a supplier of camera-based chips and software to the global mobile industry. And now, in a new deal with Luminar, another emerging tech company on the forefront of this movement, Intel is positioning itself as its own giant of this new sector.

Nvidia Corporation (NVDA) is another one of the chipmakers and semiconductor makers fueling the revolution in transportation. And it's also riding the ESG wave to boot. Nvidia has made major progress towards a more sustainable future. But what makes NVIDIA even more special is that it is tackling the ESG trend on all fronts. In fact, it was ranked as one of the world's top 100 companies to work for due to its incredible working conditions, hiring practices and professional development programs. In addition to its ranking as one of the world's top companies to work for, it was also ranked on MIT Tech Review's 50 Smartest Companies list and the Human Rights Watch's Corporate Equality Index.

With more and more demand coming for semiconductors and new chip technology hitting the market, companies like Nvidia and Intel are going to be some of the biggest benefactors. They're already well-known in the industry, and this could just be their time to really shine.

Taiwan Semiconductor Manufacturing Company is the world's largest contract chip manufacturer, meaning it's tasked with making chips for dozens of fabless tech companies including Apple, Qualcomm, Nvidia and Advanced Micro Devices (AMD) among others.

AMD, for its part, used to control its own factories which bore a huge burden on the company's bottom line. Now that it has spun its fab department into its own company called GlobalFoundries in 2009, however, it contracts with outside firms such as TSMC to actually manufacture its chips.

Microsoft (MSFT) is a tech giant that creates everything from software to hardware and more. This is important because not only does it help companies with exploration of minerals, it relies on them just as much. Microsoft is a company that is also going above and beyond in its emissions goals, aiming to be carbon neutral in the next ten years. A feat that will not be an easy task for such a massive technology corporation. Why does that matter in the lithium race? Because the green energy boom will be destroyed without the vital metal

That's why Bill Gates' tech giant has made numerous investments in clean energy across the globe. From Ohio to the Netherlands, Microsoft is pouring millions into solar and wind projects to not only help reduce its own carbon footprint but also help neighboring communities do the same.

By. Lars Andersson

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Forward-Looking Statements

This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the demand for ride sharing services will grow; that Steer can help change car ownership in favor of subscription services; that new tech deals will be signed by Facedrive and deals signed already will increase company revenues; that Facedrive will achieve its plans for manufacturing and selling Tracescan devices; that Facedrive will be able to expand to the US and globally; that Facedrive will be able to fund its capital requirements in the near term and long term; and that Facedrive will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that riders are not as attracted to EV rides as expected; that competitors may offer better or cheaper alternatives to the Facedrive businesses; changing governmental laws and policies; the company's ability to obtain and retain necessary licensing in each geographical area in which it operates; the success of the company's expansion activities and whether markets justify additional expansion; the ability of the company to attract drivers who have electric vehicles and hybrid cars; and that the products co-branded by Facedrive may not be as merchantable as expected. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

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