The Tortoise and the Tesla
PLUS: Big moves in Innovation and Disruption
One hundred percent. That's how much Volkswagen is up year to date. Since last week's Power Day, where the carmaker showcased its battery strategy and EV roadmap, the stock has seen gains usually associated with the original EV innovator, TESLA. General Motors, another ICE incumbent, is also climbing on board the electric bus. GM’s share price is up 45% YTD. The slow-moving tortoise in the room is of course, the world's number one OEM Toyota.
Toyota has yet to floor the accelerator on its EV strategy, but this is only a matter of time. Until now, the company has been hedging its bets. CEO Akio Toyoda is spinning many plates in the air - 10 million cars rolling of its production lines every year, a complex global production platform and supply chain spanning profitable ICE vehicles, hybrids, and grand plans to commercialize its hydrogen technology.
Toyota, however, is by no means ignoring the EV wave. Over the past few months, the company has teased a new solid-state battery technology, declared it will release two EVs into the US market 2022. And now WATCH THIS. Toyota’s first EV Crossover for Europe? It likely all comes together in April, at the Shanghai Motor Show, a showcase for all the above and a new e-TNGA platform for EV production. Yes, Toyota has been hedging its bets and moving cautiously, but its execution is second to none once it enters the race.
Just as the regular car buyer starts to embrace an electric future, the disruptors TESLA and NIO are about to get disrupted by the incumbents. With more EV makes and models on the road, consumers may switch their allegiance to the tried and trusted brands. So too might investors - TESLA's $670b market cap, supported by just over 500,000 units of production, is in danger of multiple contraction. Nio’s $70bn market cap is underpinned by just over 140,000 units. GM, VW, and BMW were fast out of the blocks, but as with Aesop’s Fables, it will be the tortoise that wins the race.
🗞 NUGGETS 🗞
More on VW’s 🔋plan to build six new battery giga-factories in Europe with a total production capacity of 240 GWh. ElectrekElectric Cars Report
we will drive down the cost of battery systems to significantly below €100 per kilowatt hour. This will finally make e-mobility affordable and the dominant drive technology
Japan’s ecommerce market is bigger than you think. Japan is the world’s third-largest economy and the fourth-largest ecommerce market, with sales of $115bn. But online retail accounts for only 10% of total retail sales in Japan, so there is a lot of room for growth. Web Retailer
Mario Coins. Universal Studio Japan opened the long-awaited Mario World at its Osaka theme park. Nintendo investors have long been frustrated by the game maker’s reluctance to more aggressively commercialize its fan base. Japan Today
A new Unicorn on the block 🦄. Softbank’ Vison Fund 2 has invested in PatSnap, at a valuation over $1b. The Singapore developer of software helps companies analyze patent information and boasts 10,000 customers, including Dyson and Spotify. nikkei
Apple Car 🍎? Nidec and Foxtron Vehicle Technologies have signed a memorandum of cooperation. Foxtron was established last year as a venture between Taiwan’s Yulon Group and Foxconn, the world’s largest assembler of iPhones. Nidec is gearing up to be the world's largest supplier of traction motors.......Coincidence? Bloomberg
📈 TOP MOVERS 📈
Who cares about rising US yields? Over 75% of the 140 stocks in our Japan Innovation & Disruption (JID) universe were up this week.
🔺+25% Kudan (4425, Mkt Cap $350mn), a provider of augmented reality software for cars, drones, and robots, rose after the company joined NVIDIA’s Partner network.
🔺+24% Pharma Foods (2929, Market Cap $925mn), the functional food biotech company, rose as shipments for its Newmo hair growth formula exceeded 4mn in February. Pharma Foods also tied up with Sanyo Chemical (4471) to cooperate on cosmetics and medicinal R&D.
🔺+21% Raccoon (3031, Mkt Cap $450mn), the E-commerce and payments systems provider, was well-bid this week after its “Paid” service was adopted by local EC platform YourMyStar, that connects repair and renovation craftsmen with customers.
🔺+16% Smargi (4431, Mkt Cap $510mn), provider of cloud-based POS cash register service for retail shops, reported 3Q OP of ¥245mn, +35%YoY.
🔻-16% Link-U (4446, $145mn), the digital content distribution network, reported lower interim profits and cut full year estimates on weakness in its manga comic distribution.