Changes in mobility

Whereas in previous decades the development in the car industry had almost come to a halt, we have seen momentum picking up in recent years in the development of alternative forms of propulsion in this sector.

E-car technology should prevail in the long run – our research partners agree on that. For other technologies such as fuel cells, we will need more time i.e. years of R&D to make this kind of drive ready for the mass market.

At the moment, fuel cell vehicles are too unprofitable for companies. The costs for consumers are too high as well, which does not facilitate a switch from fossil energy carriers to hydrogen-driven cars.

Fleet goals for 2021

One reason for the rise of this sector is the diesel scandal. Politics have increasingly put in place incentives for manufacturers to produce vehicles with alternative forms of propulsion. One example in this context is the fleet goal of the EU for 2021.

However, our research partners largely disagree about the effects on companies. Whereas plug-in hybrids are advantageous to the CO₂ balance and the ability to reach emission targets, many producers feel it is not enough to comply with the permitted thresholds.

In the event of non-compliance, they would face billions in fines. It remains to be seen whether and, in particular, what manufacturers will reach the ambitious targets set by politics.

E-cars as promise for the future

Emission targets for entire fleets can only be reached in the long term if enough e-cars are sold. To electromobility, battery technology is one of the core fields of research. We often see significant progress in this area when it comes to the one-off production of new battery types.

However, at the moment only lithium-ion batteries are fit for market. They are not only used in e-vehicles, but also in most laptops and smartphones that we work with on a daily basis. Problems in connection with the production of such batteries are largely glossed over.

For example, the mining of lithium requires enormous amounts of water. Also, the global lithium reserves are mainly in countries that have problems with water supply as is.

Bolivia, Chile, and Argentina are among them. However, the mining of these resources can also be a way of furthering economic progress. Ultimately our research partners regard electromobility as the future of the car industry in the medium term.

SUVs – a contradiction to other goals

The rising sales figures in the SUV segment stand in stark contrast to the ambitious emission targets. Producers benefit from increased margins in this segment – a cash cow that has become a pillar of their fleet.

This trend is in clear contradiction to the goals of the car manufacturers to reduce CO₂ emissions: regardless of the kind of drive a SUV will come with in the future, it will produce more CO₂ than other vehicles.

Autonomous cars

While promises of a future of autonomous, self-driving vehicles sound great, our research partners believe that this scenario is still far off. Also, the current trend of car-sharing models suggests that people are switching from public transportation to cars at increasing rates.

This would mean more contamination for the environment and more difficulty in reaching the emission goals. And this would also be the case for autonomous cars.

Problems with autonomous cars should not be overlooked – they mainly come in the ethical and legal variety.

Our research partners do not expect internet companies to enter the market via autonomous driving. After all, the automotive sector offers only very low margins in comparison with the other business fields of that sector. The risk of failing to successfully establish an own car brand should not be underestimated.

 

^{Legal note:
Prognoses are no reliable indicator for future performance.}

 

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website www.erste-am.com under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the key information document is available, and any other locations where the documents can be obtained are indicated on the website www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.erste-am.com.

N.B.: The performance scenarios listed in the key information document are based on a calculation method that is specified in an EU regulation. The future market development cannot be accurately predicted. The depicted performance scenarios merely present potential earnings, but are based on the earnings in the recent past. The actual earnings may be lower than indicated. Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance.

Please note: Past performance is not a reliable indicator of the future performance of a fund. Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice, does not take into account the legal regulations aimed at promoting the independence of financial analyses, and is not subject to a prohibition on trading following the distribution of financial analyses.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the referring Sparkassen banks and Erste Bank.

Please also read the “Information about us and our securities services” published by your bank.

Subject to misprints and errors.