Auto suppliers: UBS says only few will master the transition to EV

Aisin

03/03/2021 12:07

** UBS expects that only a few suppliers will succeed in
delivering full electric vehicle (EV) powertrain systems at
scale, finding mixed market sentiment for suppliers exposed to
the sector
    ** Broker says that many suppliers exposed to internal
combustion engine (ICE) powertrain - an engine mechanism - have
no other choice than to rapidly shift their content into EV
    ** It estimates that overall EV powertrain revenue pool size
will exceed pure legacy ICE powertrain revenue pool size by
end-2030, with 2021 as a turning point 
    ** UBS expects the losses incurred by EV suppliers to start
improving sharply, and new major orders from original equipment
manufacturers (OEMs) for EV production from 2023-25 
    ** Findings from a disassembling of Volkswagen's  VOWG_p.DE 
ID.3 fully-electric model make the broker more optimistic on the
EV powertrain component landscape, setting new standards for
legacy OEMs and suppliers 
    ** Globally, UBS prefers Aptiv  APTV.N , Valeo  VLOF.PA ,
Denso  6902.T , Nidec  6594.T  Toyota Industries  6201.T , Huayu
 600741.SS , TE Connectivity  TEL.N , Amphenol  APH.N , Keysight
 KEYS.N  and Continental  CONG.DE  
    ** Broker upgrades Continental to "buy" from "neutral",
confident that the group can finance the (elevated) investments
in autos while still generating a strong free cash flow
    ** Its least preferred suppliers globally include Veoneer
 VNE.N  and Aisin Seiki  7259.T , both rated "sell"   

 ((marta.frackowiak@thomsonreuters.com))