EV shift puts auto suppliers at a crossroads - UBS

Aisin

21/07/2022 14:19

** Powertrain electrification is attracting substantial
attention among EV investors, UBS says, seeing the market expect
original equipment makers (OEMs) will insource the entire
process, within the shift to a fully electric auto world, while
suppliers will struggle as their product portfolio becomes
"irrelevant"
    ** "We struggle to see a path in which auto suppliers
generate attractive profitability margins selling EV-related
parts, due to intensifying competition, underexposure to the
fastest-growing OEMs, excess capacity risk and higher-for-longer
R&D", UBS says 
    ** It cuts Plastic Omnium  PLOF.PA  to "sell" from
"neutral", seeing its new investments unable to offset the loss
of fuel tank revenues - 30% of its total revenues -  on the
transition to full electric vehicle adoption
    ** It's sceptical about Plastic Omnium's investing more in
alternative technologies, some of which have limited viability,
like hydrogen or batteries
    ** UBS names the stock as one of its least favoured for the
electrification shift, alongside peers Schaeffler  SHA_p.DE  and
Aisin  7259.T 
    ** It splits its coverage into three categories:
    * powertrain-agnostic: Aptiv  APTV.N , Autoliv  ALV.N 
    * resilient: with Valeo  VLOF.PA , Denso  6902.T , Toyota
Industries  6201.T , Hanon Systems  018880.KS ; 
    * challenged: Vitesco  VTSCn.DE , Faurecia  EPED.PA ,
Plastic
Omnium, Schaeffler, Nidec  6594.T , Aisin, Huayu  600741.SS 


 (Reporting by Elena Vardon)
 ((elena.vardon@tr.com))