Putting EV Valuations Into Perspective
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Putting EV Valuations Into Perspective

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Putting EV Valuations Into Perspective

The global push for lower emissions has created a mania around pure-electric automakers. While Tesla leads the charge, institutional investors have also piled into many of its younger rivals.

For example, in 2019, Saudi Arabia’s sovereign wealth fund invested $1.3 billion into Lucid Motors. One year later, it was revealed that Amazon had a 20% stake (worth $3.8B) in Rivian.

To see how quickly EV valuations have ballooned, we’ve visualized the historical market capitalizations (market caps) of 10 prominent automakers.

Legacy vs Pure-Electric

The legacy group includes five top traditional automakers, while the EV group includes the five most valuable pure-electric automakers that are listed on an American exchange.

The following table lists the market caps of these companies at various dates. While XPeng and NIO are listed on the New York Stock Exchange, they do not currently sell cars in the U.S.

AutomakerType20102015202102/22/2022
🇺🇸 TeslaEV$3B$31B$1,061B$849B
🇯🇵 ToyotaLegacy$124B$191B$255B$256B
🇩🇪 Volkswagen GroupLegacy$59B$79B$129B$128B
🇩🇪 Mercedes-BenzLegacy$61B$94B$83B$89B
🇺🇸 FordLegacy$63B$57B$83B$69B
🇺🇸 General MotorsLegacy$55B$51B$85B$68B
🇺🇸 RivianEVN/AN/A$93B$55B
🇺🇸 LucidEVN/AN/A$63B$42B
🇨🇳 NIOEVN/AN/A$50B$35B
🇨🇳 XpengEVN/AN/A$41B$30B

Source: Companies Market Cap

At the end of 2021, Tesla and its four EV rivals were worth a combined $1.3 trillion. This was more than double of the legacy group, which was worth $635 billion. EV valuations have cooled since then, though Tesla is still the world’s most valuable automaker by a significant margin.

U.S. Sales in 2021

Comparing U.S. sales gives an interesting perspective on these companies’ relative scale. Once again, note that XPeng and NIO do not sell cars in America. We’ve provided figures for their home market (China) instead.

AutomakerU.S. Sales in 2021
General Motors2.3 million
Toyota2.2 million
Ford1.9 million
Volkswagen Group630,000
Tesla361,000 (est.)
Mercedes-Benz330,000
XPeng98,000 (China)
NIO91,000 (China)
Rivian920
Lucid 520 (est.)

Source: Good Car Bad Car

Impressively, Tesla has overtaken Mercedes in the U.S. to become one of the country’s top luxury brands.

The Long Road Ahead

To satisfy investor expectations, Rivian and Lucid will need to rapidly scale their production and sales. Failing to do so could lead to significant stock price volatility.

Investors should also note that both companies could experience similar challenges as Tesla, which Musk has referred to as “production hell”. Rivian has already pushed back deliveries of its first SUV, while Lucid customers have been notified of delays due to “fit and finish” issues.

Nevertheless, these young manufacturers are setting some serious goals. Rivian aims to produce one million cars annually by the year 2030, while Lucid is targeting a more conservative 49,000 cars in 2023.

Tesla Goes on the Defensive

Tesla is still the undisputed EV leader, but competition is rapidly heating up.

On one hand, legacy automakers have been investing heavily in EV development, and new models are coming en masse. The Volkswagen Group is the biggest threat, selling 453,000 EVs globally in 2021 (up 96% over 2020). For reference, Tesla reported global sales of 936,000 in 2021.

On the other hand, Tesla must also defend its market share from an onslaught of Chinese entrants. This includes XPeng and NIO, which appear to be on similar trajectories. Both firms were founded in 2014, both sold nearly 100,000 EVs in 2021, and both have recently expanded into European markets. A U.S. expansion also seems to be imminent.

With the entire auto industry moving towards battery powered vehicles, will the market rethink its valuation of Tesla?

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Technology

Synthetic Biology: The $3.6 Trillion Science Changing Life as We Know It

The field of synthetic biology could solve problems in a wide range of industries, from medicine to agriculture—here’s how.

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How Synthetic Biology Could Change Life as we Know it

Synthetic biology (synbio) is a field of science that redesigns organisms in an effort to enhance and support human life. According to one projection, this rapidly growing field of science is expected to reach $28.8 billion in global revenue by 2026.

Although it has the potential to transform many aspects of society, things could go horribly wrong if synbio is used for malicious or unethical reasons. This infographic explores the opportunities and potential risks that this budding field of science has to offer.

What is Synthetic Biology?

We’ve covered the basics of synbio in previous work, but as a refresher, here’s a quick explanation of what synbio is and how it works.

Synbio is an area of scientific research that involves editing and redesigning different biological components and systems in various organisms.

It’s like genetic engineering but done at a more granular level—while genetic engineering transfers ready-made genetic material between organisms, synbio can build new genetic material from scratch.

The Opportunities of Synbio

This field of science has a plethora of real-world applications that could transform our everyday lives. A study by McKinsey found over 400 potential uses for synbio, which were broken down into four main categories:

  • Human health and performance
  • Agriculture and food
  • Consumer products and services
  • Materials and energy production

If those potential uses become reality in the coming years, they could have a direct economic impact of up to $3.6 trillion per year by 2030-2040.

1. Human Health and Performance

The medical and health sector is predicted to be significantly influenced by synbio, with an economic impact of up to $1.3 trillion each year by 2030-2040.

Synbio has a wide range of medical applications. For instance, it can be used to manipulate biological pathways in yeast to produce an anti-malaria treatment.

It could also enhance gene therapy. Using synbio techniques, the British biotech company Touchlight Genetics is working on a way to build synthetic DNA without the use of bacteria, which would be a game-changer for the field of gene therapy.

2. Agriculture and Food

Synbio has the potential to make a big splash in the agricultural sector as well—up to $1.2 trillion per year by as early as 2030.

One example of this is synbio’s role in cellular agriculture, which is when meat is created from cells directly. The cost of creating lab-grown meat has decreased significantly in recent years, and because of this, various startups around the world are beginning to develop a variety of cell-based meat products.

3. Consumer Products and Services

Using synthetic biology, products could be tailored to suit an individual’s unique needs. This would be useful in fields such as genetic ancestry testing, gene therapy, and age-related skin procedures.

By 2030-2040, synthetic biology could have an economic impact on consumer products and services to the tune of up to $800 billion per year.

4. Materials and Energy Production

Synbio could also be used to boost efficiency in clean energy and biofuel production. For instance, microalgae are currently being “reprogrammed” to produce clean energy in an economically feasible way.

This, along with other material and energy improvements through synbio methods, could have a direct economic impact of up to $300 billion each year.

The Potential Risks of Synbio

While the potential economic and societal benefits of synthetic biology are vast, there are a number of risks to be aware of as well:

  • Unintended biological consequences: Making tweaks to any biological system can have ripple effects across entire ecosystems or species. When any sort of lifeform is manipulated, things don’t always go according to plan.
  • Moral issues: How far we’re comfortable going with synbio depends on our values. Certain synbio applications, such as embryo editing, are controversial. If these types of applications become mainstream, they could have massive societal implications, with the potential to increase polarization within communities.
  • Unequal access: Innovation and progress in synbio is happening faster in wealthier countries than it is in developing ones. If this trend continues, access to these types of technology may not be equal worldwide. We’ve already witnessed this type of access gap during the rollout of COVID-19 vaccines, where a majority of vaccines have been administered in rich countries.
  • Bioweaponry: Synbio could be used to recreate viruses, or manipulate bacteria to make it more dangerous, if used with ill intent.

According to a group of scientists at the University of Edinburgh, communication between the public, synthetic biologists, and political decision-makers is crucial so that these societal and environmental risks can be mitigated.

Balancing Risk and Reward

Despite the risks involved, innovation in synbio is happening at a rapid pace.

By 2030, most people will have likely eaten, worn, or been treated by a product created by synthetic biology, according to synthetic biologist Christopher A. Voigt.

Our choices today will dictate the future of synbio, and how we navigate through this space will have a massive impact on our future—for better, or for worse.

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Energy

How Far Are We From Phasing Out Coal?

In 2021 coal-fired electricity generation reached all-time highs, rising 9% from the year prior. Here’s what it’d take to phase it out of the energy mix.

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How Far Are We From Phasing Out Coal?

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

At the COP26 conference last year, 40 nations agreed to phase coal out of their energy mixes.

Despite this, in 2021, coal-fired electricity generation reached all-time highs globally, showing that eliminating coal from the energy mix will not be a simple task.

This infographic shows the aggressive phase-out of coal power that would be required in order to reach net zero goals by 2050, based on an analysis by Ember that uses data provided by the International Energy Agency (IEA).

Low-Cost Comes at a High Environmental Cost

Coal-powered electricity generation rose by 9.0% in 2021 to 10,042 Terawatt-hours (TWh), marking the biggest percentage rise since 1985.

The main reason is cost. Coal is the world’s most affordable energy fuel. Unfortunately, low-cost energy comes at a high cost for the environment, with coal being the largest source of energy-related CO2 emissions.

China has the highest coal consumption, making up 54% of the world’s coal electricity generation. The country’s consumption jumped 12% between 2010 and 2020, despite coal making up a lower percentage of the country’s energy mix in relative terms.

Top Consumers2020 Consumption (Exajoules) Share of global consumption
China 🇨🇳82.354.3%
India 🇮🇳17.511.6%
United States 🇺🇸9.26.1%
Japan 🇯🇵4.63.0%
South Africa 🇿🇦3.52.3%
Russia 🇷🇺3.32.2%
Indonesia 🇮🇩3.32.2%
South Korea 🇰🇷3.02.0%
Vietnam 🇻🇳2.11.4%
Germany 🇩🇪1.81.2%

Together, China and India account for 66% of global coal consumption and emit about 35% of the world’s greenhouse gasses (GHG). If you add the United States to the mix, this goes up to 72% of coal consumption and 49% of GHGs.

How Urgent is to Phase Out Coal?

According to the United Nations, emissions from current and planned fossil energy infrastructure are already more than twice the amount that would push the planet over 1.5°C of global heating, a level that scientists say could bring more intense heat, fire, storms, flooding, and drought than the present 1.2°C.

Apart from being the largest source of CO2 emissions, coal combustion is also a major threat to public health because of the fine particulate matter released into the air.

As just one example of this impact, a recent study from Harvard University estimates air pollution from fossil fuel combustion is responsible for 1 in 5 deaths globally.

The Move to Renewables

Coal-powered electricity generation must fall by 13% every year until 2030 to achieve the Paris Agreement’s goals of keeping global heating to only 1.5 degrees.

To reach the mark, countries would need to speed up the shift from their current carbon-intensive pathways to renewable energy sources like wind and solar.

How fast the transition away from coal will be achieved depends on a complicated balance between carbon emissions cuts and maintaining economic growth, the latter of which is still largely dependent on coal power.

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