(BFM Bourse) – UBS estimates that the development of innovative modes of transport in cities will create opportunities representing trillions of dollars. The Swiss establishment also provides some well-positioned courses of action to take advantage of this trend.
It is one of these great megatrends which will transform the world economy: urbanization at high speed. According to the United Nations Organization (UN), nearly 70% of the world’s population will live in metropolises in 2050, compared to 55% in 2018.
This boom will logically cause a surge in inter- and intra-urban transport needs, with the key to “many investment opportunities”, underlines UBS in a recent very detailed study on the subject. For the Swiss bank, these opportunities amount to trillions of dollars, and take many forms.
Robotaxis that would totally change the game
The development of battery-powered electric vehicles is a glaring example. The Swiss bank estimates that the global market could exceed 1,000 billion dollars in 2026 against an evaluation of between 100 and 200 billion dollars for 2021. The market for ride-hailing services, for its part, would increase from 186 billion dollars to 545 billion on the same period.
More original, UBS estimates that “eVTOL” (electric vertical take-off and landing), that is to say electric aircraft with vertical take-off and landing, nicknamed “flying taxis”, could represent a market of 136 million dollars in 2026, while that of electric scooters would amount to 1.6 billion on the same date, against around 700 million last year.
The rise of autonomous vehicles or “robotaxis” could for its part constitute a “pool” of income of more than 2,000 billion dollars by 2030, according to the Swiss bank. In its reference scenario, UBS also estimates that these intelligent cars could completely disrupt urban transport habits. By 2040, “robotaxis” would represent 30% of intra-urban travel, according to its projections. This would cause a sharp drop in the use of personal vehicles, which would then only constitute 7% of intra-urban trips in 2040 compared to 32% in 2020.
Airbus to play “flying taxis”
All of these innovative modes of transport would be favored by many underlying needs, including decarbonisation, the reduction of pollution or the need to decongest urban transport. Conversely, several uncertainties are likely to constitute obstacles to their growth, in particular the evolution of the cost and the regulation, recognizes the Swiss bank.
User acceptability is another unknown. On this last point, UBS conducted a survey of 6,000 people and found that the participants showed a still limited but growing attraction for the most innovative means of transport, such as flying taxis or autonomous cars. For example, almost 20% of them are ready to board a flying taxi compared to less than 15% in a similar survey carried out by the Swiss bank last year.
For investors wishing to surf on the rise of these new trends, UBS has selected several stocks by major theme. For VTC, the bank currently prefers Uber and the Chinese Baidu to Lyft. In the automotive sector, the Swiss bank unsurprisingly recommends Tesla, but also Mercedes, Porsche, Ferrari as well as technology groups specializing in electronic components equipping vehicles, such as the German Infineon, the American Nvidia and the Japanese Renesas.
For “flying taxis”, the Swiss bank is choosing Airbus, which is currently working on its CityAirbus NextGen, a prototype that it hopes to be able to certify in 2025. If they are not favored by UBS, the Japanese Honda and Korean Hyundai Motor have also recently entered this market.
The Swiss bank lists several groups to bet on the growth of electric scooters and more broadly of two wheels, whose production should grow by 7.5% per year on average between 2021 and 2026, according to UBS. The establishment cites the Indian TVS Motor, Mahindra & Mahindra, the Japanese Suzuki, the American Polaris, and the Chinese Yadea. FYI, the bank has only a “neutral” opinion on Harley Davidson, the most famous brand in the motorcycle world.
Julien Marion – ©2022 BFM Bourse